TIDMFUTR
RNS Number : 0019I
Future PLC
30 November 2022
30 November 2022
FUTURE plc
2022 FULL YEAR RESULTS
Diversification strategy delivers record profitability
Continued profit growth and market share gains
Future plc (LSE: FUTR, "Future", "the Group"), the global
platform for specialist media, today publishes its results for the
year ended 30 September 2022.
Highlights
Financial results for the year ended 30 September 2022
Adjusted results (1) FY 2022 FY 2021 Var
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Adjusted operating profit (GBPm) 271.7 195.8 +39%
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Adjusted operating profit margin
(%) 33% 32% +1ppt
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Adjusted diluted EPS (p) 163.5 131.9 +24%
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Adjusted Free Cash Flow(3) 267.2 199.3 +34%
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Statutory results FY 2022 FY 2021 Var
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Revenue (GBPm) 825.4 606.8 +36%
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Operating profit (GBPm) 188.6 115.3 +64%
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Profit before tax (GBPm) 170.0 107.8 +58%
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Cash generated from operations
(GBPm) 268.5 197.2 +36%
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Diluted EPS (p) 100.9 58.1 +74%
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Financial highlights
-- Full year revenue up 36% to GBP825.4m (FY 2021: GBP606.8m),
reflecting a combination of continued organic(2) growth (2% in the
year of which 5% from Media) and contribution from acquisitions.
Strong growth in the US, with organic growth rates of +7%.
-- Excellent full year results with adjusted operating profit(1)
growth of 39% to GBP271.7m (FY 2021: GBP195.8m), of which 11% was
organic (including 2% FX), 10% from the platform effect and 18%
from acquisitions, significantly above our sustainable profit
growth model target of 25% through the cycle. Statutory operating
profit up 64% to GBP188.6m (FY 2021: GBP115.3m).
-- Future's platform effect continues to deliver, with an
improvement in adjusted operating profit(1) margin to 33%, an
expansion of +1ppt over the prior year margin of 32% absorbing
material inflationary pressures in FY 2022 (equivalent of (2)ppt)
and initial dilutive impact of acquisitions (a further (2)ppt).
Statutory operating margin at 23%, up +4ppt (FY 2021: 19%).
-- The Group remains highly cash generative with adjusted free
cash flow(3) of GBP267.2m (FY 2021: GBP199.3m), representing 98% of
adjusted operating profit(1) (FY 2021: 102%). Cash generated from
operations was GBP268.5m (FY 2021: GBP197.2m).
-- Leverage(4) of 1.48x (FY 2021: 0.8x and increasing to 1.9x
following the Dennis acquisition on 1 October 2021). This reflects
continued rapid de-levering, resulting in net debt at the end of
the year of GBP423.6m (FY 2021: GBP176.3m). In May 2022, we
extended our RCF facilities by GBP100m and in November 2022, we
secured a new facility of GBP400m with a syndicate of banks and
supported by a partial guarantee from UK Export Finance, with
attractive terms. Total facilities at the end of FY22 were GBP660m
and GBP900m as of 30 November 2022.
Operational and strategic highlights
-- Growing relevant and valuable audiences
o Our leadership position within verticals (#1 consumer
technology in US and UK, #6 beauty and fashion in the US, #4 in the
UK; #1 in Homes in the UK)(10) delivers premium monetisation and
growth
o Group online users returned to organic growth in H2 up +2% and
+8% on a reported basis
o Further progress in increasing our online reach(11) in the US
by +3ppt to 35%
-- Diversifying and growing monetisation
o 36% revenue growth with 17% total audience growth, leveraging
our leadership positions
o Continued progress on diversifying revenue with each of the
three main monetisation routes (Advertising, Direct consumer
monetisation and Affiliates) now representing approximately a third
of revenue
o 55% of Affiliates revenue is from services (up from 49% in FY
2021)
o 48% of Magazine revenue is now from subscriptions providing
favourable mix of recurring revenues (up from 26% in FY 2021)
-- Creating value from acquisitions
o 5 acquisitions completed since October 2021, adding capability
in data, video and subscribers, while helping to enable leadership
positions in Women's Lifestyle and Wealth content. We have
allocated over GBP400m of capital during the year while remaining
disciplined in approach to leverage.
-- 'Our Future, Our Responsibility' - our ESG strategy - was
launched in December 2021 and is now well-progressed in the Group
as we make continued headway against our ambitions.
Outlook
-- Future enters FY 2023 in a strong competitive position and we
expect to further strengthen our market positions within our
verticals. The agility of the business model means we expect to
deliver modest profit growth in FY 2023.
-- The strong balance sheet and cash generation serve the
business well for ongoing investment and growth and we are
well-placed to add additional content and capabilities to further
enhance the Future platform.
-- 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.
Zillah Byng-Thorne, Future's Chief Executive, said:
"I am pleased to report another year of record results, adding
to our long-term track record, as we delivered sustained growth
across all key metrics, including revenue, profitability and free
cash flow. Our performance is testament to our diversified revenue
streams, the strength of our content and the brilliant teams we
have working across our business.
"2022 has been a busy year for us, as we allocated over GBP400m
to complete five quality earnings-accretive acquisitions which
added new capabilities to the Group and helped us to achieve
leadership positions in the 'Women's Lifestyle' and 'Wealth'
content verticals, all whilst continuing to rapidly de-lever.
"Today our content reaches over 500 million people in the UK and
US, and one in three people online in the UK and US. We have a
clear opportunity to build on the track record we have established
in the US to date by replicating our successful model in newer
verticals whilst adding further diversification to the Group.
"Looking ahead, whilst we are monitoring the macroeconomic
climate, we remain confident in our strategy and the growth
opportunities that we are uniquely placed to capitalise on, which
we expect to deliver modest profit growth and market share
gains."
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/636e5dd0ce306e2e48f6b99a
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,
exceptional items, amortisation of intangible assets arising on
acquisitions and any related tax effects. A reconciliation between
adjusted and statutory profit is shown in note 8.
2) Organic growth defined as the like for like portfolio
excluding acquisitions and disposals made during FY 2021 and FY
2022 and including the impact of closures and new launches at
constant FX rates. Constant FX rates is defined as the average rate
for FY 2022.
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
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 in 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) Audience reach includes: online users (excluding forums),
print and digital magazine and bookazines circulation, email
newsletter subscribers, social media followers and event
attendees.
6) Online users defined as monthly online users from Google
Analytics and, unless otherwise stated, is the monthly average over
the financial period. 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, 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 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 IFRS16 leases.
10) US reach score source: comScore Media Metrix Demographic
Profile, October 2022 - Desktop Age 2+ and Total Mobile 18+)
11) US reach score source: comScore Media Metrix Demographic
Profile, September 2022 - Desktop Age 2+ and Total Mobile 18+)
Enquiries:
Future plc
Zillah Byng-Thorne, Chief Executive Officer +44 (0)122 544 2244
Penny Ladkin-Brand, Chief Financial 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 global platform business for specialist media with
diversified revenue streams. Its content reaches 1 in 3 adults
online in the UK and US.
The Media division is high-growth with complementary revenue
streams including eCommerce for products and services, events, and
digital advertising (including advertising within newsletters and
video). It operates in a number of sectors including technology,
games & entertainment, music, home & gardens, sports, TV
& film, real life, knowledge, wealth & savings, women's
lifestyle and B2B. Its brands include TechRadar, PC Gamer, Tom's
Guide, Android Central, Truly, The Week, Kiplinger, GoCompare,
Digital Camera World, Homebuilding & Renovating Show,
GamesRadar+, The Photography Show, Top Ten Reviews, Marie Claire,
Live Science, Guitar World, MusicRadar, Space.com, Who What Wear,
What to Watch, Gardening Etc, Adventure and Tom's Hardware.
The Magazine division focuses on publishing specialist content,
with a combined global circulation of over 4.5 million delivered
through more than 106 magazines, and 743 bookazines published a
year. The portfolio spans technology, knowledge, games &
entertainment, sports, music, photography & design, homes &
garden, country lifestyle, TV & film and B2B. Its titles
include Country Life, Wallpaper*, Woman & Home, The Week,
Classic Rock, Decanter, Guitar Player, FourFourTwo, Homebuilding
& Renovating, Digital Camera, Guitarist, How It Works, Total
Film, What Hi-Fi? and Music Week.
Strategic and operational update
Future is a 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 revenue 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 podium positions, we become a must-have partner,
enabling monetisation optimisation and resilience through economic
cycles. This resilience is reinforced by the diversified nature of
the Group, both from content verticals, geographical locations and
monetisation capabilities.
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 since
2014 of doubling the Group's profits approximately every two
years.
Grow relevant and valuable audiences
Our first strategic objective is to meet the needs of our
audience. We are a trusted expert, helping our audience do the
things they love, whether that be how to clean their bike or which
product to buy. Our goal is to be the market leader in the markets
in which we operate, and this should enable us to reach 1 in 2 in
the US as we extend our reach in these vertical markets, namely:
Technology, Lifestyle (Fashion & Beauty and Homes), Wealth and
B2B while adding new verticals.
In the period, we have made further progress towards our goal
with our US reach growing by 3ppt to 35% (source: Comscore). We
have maintained our leadership position in Technology and are now
number six in Fashion and Beauty with key organic sites, such as
MarieClaire and Woman & Home, growing in excess of 100% on
Comscore. We are number 11 in Homes with our biggest site, Homes
& Gardens growing by over 60% on Comscore. In the UK, our reach
is 38%, and we have maintained our leadership position in Tech,
whilst establishing #4 in Fashion & Beauty and #1 in Homes.
Overall audience increased to 506m (FY 2021: 432m) driven by
growth in online users, social followers and subscribers. Online
users grew by 3% driven by acquisitions and partially offset by an
organic decline of (5)% for the year as we lapped lockdown-driven
traffic spikes in the prior year, and some declines in the consumer
technology market resulting in lower consumer time online .
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 and analytics, recently bolstered by the acquisition of Waive
in March 2022, combined with the expertise of our editorial teams.
The combination allows us to reach high-intent audiences at scale,
providing a brand-safe qualified audience for advertisers and
responding to eCommerce demand.
Our performance highlights the benefit and strength of the
content vertical diversification of the Group, and our technology,
enabling us to absorb unusual market trends and continue to grow
audience share and revenues.
Diversify and grow monetisation
The second strategic objective of the Group is to diversify and
grow monetisation. The diversification of revenue streams enables
the Group to continue to perform irrespective of wider economic
conditions. Growth in monetisation is driven by a combination of a
content-led approach to acquire audiences, with a focus on
achieving market leadership positions allowing premium pricing, as
well as increasing yield by adding new routes of monetisation. For
example, in FY 2021, we launched Eagle - our voucher technology.
This year, we deployed Eagle on Tom's Guide and it is driving
fantastic results with over 5k transactions in the US in the month
of October alone.
Our oldest division, GETs (Games, Entertainment &
Technology) has seen a double-digit increase in monetisation
(digital advertising and affiliate revenues over online users in
FY2022), with over 40% of digital monetisation coming from
affiliates. This highlights the opportunities we have for our newer
verticals to grow yield in the same way. For example, in LKN
(Lifestyle, Knowledge & News) only 20% of digital monetisation
comes from affiliates. Overall, we are currently monetising GETs
online users over 1.5x more than LKN online users presenting an
opportunity to increase monetisation as well as grow the audience
in the LKN vertical.
Our 2 strategic objectives are translated into 3 strategic
pillars: sustainable organic growth, the platform effect and
creating value from acquisitions.
Sustainable organic growth
The continued focus on a valuable audience coupled with
diversified revenue streams enables the group to outperform, even
in challenging economic conditions.
Overall organic revenue growth of 2% was driven by Media organic
growth of 5%, with Magazines down (2)% year-on-year. The organic
growth in the US revenue outpaced significantly the UK (+7% vs (1)%
respectively) as a result of a different revenue mix but also more
opportunities and more favourable economic conditions.
H1 2022 H2 2022 FY 2022 FY 2021
Online users (reported) (2)% +8% +3% +8%
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Organic revenue growth
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Digital ads +10% +4% +7% +27%
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Affiliates (10)% (1)% (6)% +36%
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Events, digital licensing,
other online +86% +40% +54% (17)%
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Media revenue +5% +6% +5% +27%
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Magazine revenue +3% (8)% (2)% +4%
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Total organic revenue
growth +4% +1% +2% +23%
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UK organic revenue growth +3% (6)% (1)% +17%
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US organic revenue growth +6% +9% +7% +27%
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Digital advertising revenue has continued to perform strongly,
growing +7% organically in the year. This performance demonstrates
market outperformance, notably in the US with +10% organic growth.
This demonstrates the Group's ability to deliver valuable audiences
to advertisers. Future Studios also contribute to yield expansion.
Video on content sites generated 4x the average yield and grew by
31% organically year-on-year, representing 14% of digital
advertising revenue. The combination of data, scale and leadership
positions in a brand-safe environment provides resilience to our
advertising revenue.
Affiliate revenue saw an improvement in the second half, as
anticipated and saw an organic decline of (1)%. In the full year,
we saw an organic decline of (6)% or GBP(6.6)m, broadly in line
with the benefit we saw from the pandemic related estimated income
of cGBP5m in the prior year that we had noted in previous results.
In the current challenging consumer environment, we continue to see
consumers focusing on deals and events as evidenced by our strong
performance during Prime Day in the Summer, as well as the
performance of Eagle - our voucher technology - on Tom's Guide. In
parallel, we have continued to make progress in diversifying our
end-markets with affiliate revenue per user in our LKN (Lifestyle
Knowledge & News) vertical increasing by 1.6x including 1.8x in
our Women's Lifestyle vertical. We have seen very strong
performance from newer categories such as sleep, small appliances
including vacuums and kitchen tech, while we have continued to see
ongoing softness in wider consumer technology.
Other media revenue grew by +54% organically, driven by events
which recovered as restrictions were lifted. During the period, we
hosted 111k people over 65 events.
Magazines organic revenue was down (2)% year-on-year, with a
decline of (8)% in H2, as we have lapped the COVID-comparators.
With the acquisition of Dennis in October 2021, subscriptions now
represent 49% of the magazines division. This adds recurring,
predictable revenues helping to mitigate the secular decline in
magazines, with proforma revenue growth (including Dennis) for
Subscription of 6% in the year.
The Platform Effect drives 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. A core
part of our strategy is ensuring that over the long term we
continue to deliver profitable growth. Critical to enabling this is
the continued investment in our technology and people. These
investments are leveraged across the business driving the Platform
Effect.
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 52
sites on the Vanilla website platform (FY 2021: 41). During the
year, we continued to enrich our data audience platform Aperture
and its activations. In addition to its capability of producing
high-value advertising segments, Aperture has launched
SmartDiscovery. This leverages our newly acquired asset Waive to
spot content trends as they emerge to drive audience growth through
first-mover advantage. In October, the most read article - about
Ryan Reynolds confirming a documentary on John Candy on CinemaBlend
- was a trend identified by using SmartDiscovery. On average, where
we deploy SmartDiscovery we see a doubling of page views. This
capability lives across our Entertainment vertical, driving
efficiency of content.
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
over 50% of our revenue from content being produced in the prior
periods in September.
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,
while creating teams of like-minded experts within the
organisation. We will be opening a new hub in Cardiff at the start
of 2023 to leverage the proximity to graduate talent in an
affordable city location.
Whilst continuing to invest in our business and our people, our
scalable operating model and disciplined approach to the
integration of our acquisitions has driven record profit. The cost
synergies delivered through the recent acquisitions coupled with
our focus on process re-engineering has enabled us to continue to
invest organically. We have been able to increase adjusted
operating margin despite continued investment in content, people,
technology and infrastructure and cost inflation. Our business
model has allowed us to absorb salary increases to help our
employees mitigate the impact of inflation as well as cost of sales
increases notably in our magazine division.
The adjusted operating profit growth of 39%, of which 11% was
organic (including 2% FX tailwind), 10% from the platform effect
and 18% from acquisitions, is above our sustainable profit growth
model of 25% through the cycle (10% organic, 5% platform effect and
10% from acquisitions).
Creating value through acquisitions
Accelerating the execution of our strategy with value creating
acquisitions is a key part of our capital allocation. We remain
highly disciplined when it comes to acquisitions with 23 deals
reviewed for each transaction that we executed in the past 12
months, as we rigorously ensure that acquisitions have strong
strategic alignment and drive additional value creation.
GoCo Group and Mozo - Further diversifying our business model -
eCommerce services
Future's diversification strategy was demonstrated with the
acquisitions of GoCo and Mozo in February 2021, bringing eCommerce
affiliate services into the Group and establishing our Wealth &
Savings vertical. A challenging consumer backdrop means Savings
content is more important than ever, helping consumers save money
and find the right product for everyday necessities.
As we enter the second year of ownership of GoCo, we are pleased
with the performance showing continued signs of success in 2022,
including the re-branding to Go.Compare. Our SEO expertise has
already delivered improvement with consistent progress on car
insurance (from #4 in search in September 2021 to #1 in September
2022), home insurance (from #7 in September 2021 to #5 in September
2022) and life insurance (from #11 in September 2021 to #7 in
September 2022) combined with using our email newsletter capability
to drive further engagement. The rich first-party data from GoCo is
enhancing Aperture, our data platform, allowing us to create
super-segments for premium advertising. Additionally, we have made
further progress on diversifying away from car insurance with 34%
of revenue now from verticals other than car insurance (up +5ppt
year on year). This has resulted in Go.Compare growing revenues at
1% in the period on a proforma basis, despite continued challenges
in the car and energy markets. Furthermore, the work to create a
modular tech stack for the comparator technology is progressing,
with our van and my account proposition going live in October 2022.
We are on track to complete the roll-out of this technology across
the comparison verticals in 2023. Finally, after the launch of
Eagle in FY 2021, using the MyVoucherCodes capability, we have
deployed it further in 2022, notably on Tom's Guide and have seen
great traction with 5k transactions in the US in the month of
October.
The Mozo business, an Australian price comparison website
focused on personal finance products, has been integrated into the
existing Future operations in Australia, providing the opportunity
to invest in a new strengthened local leadership team as we gain
scale. Mozo is also collaborating with the GoCo teams and launched
a broadband comparison proposition in May, amongst a number of
initiatives. Mozo revenue grew by 26% year-on-year on a proforma
basis demonstrating the Group's ability to drive value from
acquisitions.
Marie Claire US - enhancing our Women's Lifestyle vertical in
North America
In May 2021, the Group acquired a joint venture between MCA and
Hearst operating the website MarieClaire.com and its assets.
Simultaneously, the Group entered into a five-year licence
agreement with Marie Claire Album S.A.S. to operate the title in
the US and Canada. Marie Claire US is now integrated into our fast,
brand safe platform having migrated to Vanilla at the end of 2021
and is performing well with significant yield increase on both
direct and indirect advertising revenue.
Dennis - strengthening our Wealth & Savings, Knowledge and
B2B verticals and our North American footprint
In October 2021, we completed the acquisition of Dennis, a
leading consumer media subscriptions business, which includes
trusted Wealth, Knowledge and B2B technology specialist titles such
as, Kiplinger, MoneyWeek, The Week & IT Pro.
The acquisition enables the Group to scale its Wealth &
Savings vertical through the MoneyWeek and Kiplinger brands which
we have identified as a significant strategic vertical
opportunity.
In addition, the acquisition has helped to further diversify the
Group's revenue by materially increasing the Group's recurring
revenues through subscriptions, and further extending the Group's
reach in the North American market.
The integration of Dennis completed in the first half and the
combined teams are already working to deliver the strategic plan of
the acquisition. Our proprietary ad tech Hybrid has been deployed
across the Dennis brands, translating into double digit improvement
in yields and the new Wealth bureau is enabling wealth content to
sit on other websites such as Woman&Home with its Smart With
Money channel. In the period, we migrated Kiplinger to Vanilla with
further migrations of the remaining Dennis brands scheduled for FY
2023. Kiplinger newsletter has migrated to the SmartBrief
technology, resulting in a 2.5x increase in ad click-through rates.
The performance during the year has been strong with double-digit
revenue growth, demonstrating the strength and resilience of the
subscription business.
Waive - strengthening data insight capabilities
In March 2022, we completed the acquisition of Waive, an
artificial intelligence enabled platform which provides
intelligence on emerging content trends. This acquisition will
extend Future's Aperture data platform and enhanced data science
capabilities with the launch of SmartDiscovery, as mentioned
above.
WhatCulture.com - enhancing our Entertainment vertical and video
monetisation capabilities
On 23 March 2022, we completed the acquisition of
WhatCulture.com, a digital-only publisher focused on gaming and
entertainment.
This acquisition further strengthens Future's position in video,
notably with its expertise in the monetisation on YouTube.
WhatCulture will benefit from the Future proprietary technology
stack and operating model to drive the platform effect whilst
bolstering Future's gaming and entertainment vertical. The
integration is well progressed with payroll, IT and most financial
systems already migrated. The base in Newcastle provides the
opportunity for a Northern hub for video creation across the group
going forward.
Who What Wear - bolstering our Women's lifestyle vertical and US
reach
On 15 June 2022, we completed the acquisition of Who What Wear,
a leading digital-only Women's lifestyle publisher. The acquisition
further strengthens Future's position in the Women's Lifestyle
vertical and gives the Group greater scale and reach in North
America to further monetise its audience. Combined with the Group's
existing business, Future is now the 6th largest Beauty and Fashion
publisher in the US (Source: Comscore MMX Multi Platform Total
Audience September 2022 US). With Future's content already reaching
1 in 3 adults online in the US, the transaction will accelerate
Future's scale and revenue opportunities in the US. The Group's
existing Women's Lifestyle brands will benefit from Who What Wear's
leading direct advertising sales capabilities, whilst Who What Wear
will benefit from Future's proprietary technology stack and
operating model to drive the platform effect. Hybrid and Hawk have
been deployed on the site and the migration to Vanilla is scheduled
in the Spring of 2023, once new functionalities have been
deployed.
On 18 October 2022, we completed the acquisition of
Shortlist.com, a technology website. We will be able to deploy our
tech stack to the website to drive monetisation, whilst growing our
online users and accelerating this growth through our
capabilities.
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.
Being a responsible employer is an important part of our
strategy and in January 2022 we put in place two tiers of cost of
living increases of +2% and +4%, with the higher amount for
colleagues paid less. In all our markets, we are proud of the fact
that we have a Future base level wage that is higher than any
central or local government standard.
This year, we also paid our all-staff annual profit pool bonus
scheme in two instalments (June and December) to help mitigate the
immediate inflationary pressures we have seen. All colleagues,
except the Executive Leadership Team received an initial payment
equivalent to 40% of their full-year bonus in June. The remainder
of the annual profit pool bonus will be paid in December, which
means that all colleagues in Future will have received a minimum of
GBP1,905 as a bonus during the year.
Finally, we have brought forward our annual salary review
process from January 2023 to November 2022 with our colleagues
receiving at least a +4% increase to their salary. In addition, for
employees with lower salaries in the UK (below GBP50k), they will
receive a one-off cost of living bonus representing 2% of their
salary in their November pay.
We remain proud of and thankful to our colleagues for their hard
work and ongoing support in these continued challenging times.
In December 2021, we launched our Responsibility strategy - Our
Future, Our Responsibility. Our strategy is articulated around 4
pillars which fall under 2 headers: the Foundations pillars which
incorporates Taking Responsibility and The Culture behind the
Company, and the Differentiation pillars which consist of Shaping
the Future and Expanding Horizons. Each pillar is sponsored by a
member of the Executive Team.
During the year, the pillar leads reported progress and
achievement to the Responsibility Board Committee and the
Responsibility Steering Committee.
In the Culture behind the Company, we have also been revising
our recruitment process to ensure inclusivity and transparency.
Additionally, we foster a culture where people can do their best
work, be themselves and shine. In order to ensure the effectiveness
of our efforts, we have conducted a company-wide engagement survey,
the results of which we are translating into tangible actions
across the Group, notably to ensure clarity and transparency of
career progression.
In Expanding Horizons, we will leverage our experts to share
skills and knowledge on topics of interest to our colleagues and
audience.
Shaping the Future will see us taking a leadership position in
championing a safer internet and we've partnered with PPA (UK),
supporting them in lobbying the UK Government on its proposed
Online Safety Bill. Additionally, four of our Future websites are
certified as Green by Newsguard and we've recently published our
Responsible Content Framework as a guide for everyone producing
content at Future to ensure we honour our commitments.
In Taking Responsibility, we've already taken action with our
print products, invested in three new intelligent data centre
technologies that are 100% powered by renewable energy.
We will continue to make progress on all pillars by improving
our reporting but also translating the Responsibility strategy into
many small intentional steps that will add to an ambitious
programme for the Group over the coming years. To reflect the
increased importance of this, we have also added a responsibility
target to the executive bonus scheme for 2023.
Executive changes
Following the announcement on 20 September 2022 of Zillah
Byng-Thorne's intention to step down as CEO by the end of 2023, the
Board appointed a global executive search firm to undertake the
search for Zillah's successor. Good progress is being made and the
Board will provide a further update on this in due course. In
addition, Penny Ladkin-Brand's role has been extended to Group CFO
and Strategy Officer. Penny will continue to lead all finance
activities within the organisation, and will now also focus on
inorganic growth opportunities and execution of the strategy to
deliver medium and long-term growth. In conjunction with this,
Penny's notice period has been extended from six to twelve
months.
Outlook
-- Future enters FY 2023 in a strong competitive position and we
expect to further strengthen our market positions within our
verticals. The agility of the business model means we expect to
deliver modest profit growth in FY 2023.
-- The strong balance sheet and cash generation serve the
business well for ongoing investment and growth and we are
well-placed to add additional content and capabilities to further
enhance the Future platform.
-- 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 year ended 30 September 2022 with those for the
year ended 30 September 2021. Unless otherwise stated, change
percentages relate to a comparison of these two periods. Organic
growth defined as the like for like portfolio excluding
acquisitions and disposals made during FY 2021 and FY 2022 at
constant FX rates and including the impact of closures and new
launches. Constant FX rates is defined as the average rate for FY
2022.
FY 2022 FY 2021
GBPm GBPm
-------------------------------------- -------- --------
Revenue 825.4 606.8
-------------------------------------- -------- --------
Adjusted operating profit 271.7 195.8
Adjusted profit before tax 253.1 188.3
-------------------------------------- -------- --------
Operating profit 188.6 115.3
Profit before tax 170.0 107.8
-------------------------------------- -------- --------
Basic earnings per share (p) 101.4 59.3
Diluted earnings per share (p) 100.9 58.1
Adjusted basic earnings per share (p) 164.4 134.6
Adjusted diluted earnings per share
(p) 163.5 131.9
-------------------------------------- -------- --------
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:
FY 2022 FY 2021
GBPm GBPm
--------------------------------------- -------- --------
Adjusted operating profit 271.7 195.8
Adjusted net finance costs (18.6) (7.5)
Adjusted profit before tax 253.1 188.3
Adjusting items:
Share-based payments (including social
security costs) (6.9) (14.8)
Exceptional items (note 4) (17.9) (27.4)
Amortisation of acquired intangibles (58.3) (38.3)
Profit before tax 170.0 107.8
--------------------------------------- -------- --------
Revenue
Revenue Segment FY Segment FY
2022 2021
GBPm GBPm
--------------------------- -------------- ------ -------------- ------ ------ --------
UK US Total UK US Total YoY Organic
GBPm GBPm GBPm GBPm GBPm GBPm Var YoY
Var
--------------------------- ------ ------ ------ ------ ------ ------ ------ --------
Digital ads 67.8 163.4 231.2 61.5 125.1 186.6 +24% +7%
--------------------------- ------ ------ ------ ------ ------ ------ ------ --------
Affiliates 194.4 78.3 272.7 142.4 73.8 216.2 +26% (6)%
--------------------------- ------ ------ ------ ------ ------ ------ ------ --------
Events, digital licensing
and other media 22.0 9.3 31.3 16.5 3.5 20.0 +57% +54%
--------------------------- ------ ------ ------ ------ ------ ------ ------ --------
Total Media 284.2 251.0 535.2 220.4 202.4 422.8 +27% +5%
--------------------------- ------ ------ ------ ------ ------ ------ ------ --------
Newstrade 85.2 0.8 86.0 84.4 0.9 85.3 +1% (2)%
--------------------------- ------ ------ ------ ------ ------ ------ ------ --------
Subscriptions 75.8 65.0 140.8 45.1 2.0 47.1 +199% (11)%
--------------------------- ------ ------ ------ ------ ------ ------ ------ --------
Print advertising,
licensing and other
print 54.3 9.1 63.4 46.7 4.9 51.6 +23% +5%
--------------------------- ------ ------ ------ ------ ------ ------ ------ --------
Total Magazines 215.3 74.9 290.2 176.2 7.8 184.0 +58% (2)%
--------------------------- ------ ------ ------ ------ ------ ------ ------ --------
Total revenue 499.5 325.9 825.4 396.6 210.2 606.8 +36% +2%
--------------------------- ------ ------ ------ ------ ------ ------ ------ --------
Group revenue increased 36% or GBP218.6m to GBP825.4m (FY 2021:
GBP606.8m), achieved organically (increase of 2% at constant
currency and 5% at actual currency) and through acquisition, with
FY 2021 and FY 2022 acquisitions net of disposals contributing
GBP308.3m to revenue in the period.
UK revenue grew by 26% or GBP102.9m to GBP499.5m (FY 2021:
GBP396.6m). Total UK organic revenues declined 1% with 1% organic
revenue growth in Media being offset by a 3% decline in Magazines.
UK Media organic growth of 1% was driven by digital advertising
(+1%) as well as the recovery in events (+47%) which were
previously impacted by the pandemic, partially offset by the
decline in Affiliates revenue as expected.
Performance was strong in the US where growth of 55% or
GBP115.7m to GBP325.9m (FY 2021: GBP210.2m) and was supported by
organic growth of 7% reflecting strong growth in digital
advertising and a stronger affiliates performance despite the
impact of the comparators.
Media revenue increased by GBP112.4m or 27% and by 5%
organically. Organic digital advertising revenue grew 7% despite
the impact of lower online audiences and organic affiliate revenue
was down 6%, with the decline broadly equal to the COVID one-off
performance in the prior year. Events recovered and grew by 62% to
over GBP15m.
Magazine revenue increased by 58% to GBP290.2m (FY 2021:
GBP184.0m), including the full-year impact of the Dennis
acquisition which continued to perform well with subscription
revenues growing on a proforma basis by 6%. In the organic
portfolio, subscriptions declined by 11% as we returned to a
normalised level of subscribers post pandemic, whilst newstrade
held up well with a marginal decline at 2% organic reduction over
the prior year and advertising growing on an organic basis by 5%.
Magazine organic revenue performance marginally decreased by 2% as
we are now through the COVID comparators.
Included below is a reconciliation between statutory revenue and
organic revenue:
FY 2022 FY 2021
GBPm GBPm
--------- ---------
Total revenue 825.4 606.8
Revenue from FY 2022 and FY 2021 acquisitions (308.4) (115.2)
------------------------------------------------ --------- ---------
Organic revenue 517.0 491.6
------------------------------------------------ --------- ---------
Impact of FX at constant rates 0.3 13.3
------------------------------------------------ --------- ---------
Organic revenue at constant currency 517.3 504.9
------------------------------------------------ --------- ---------
Operating profit
Cost of sales have 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
inflationary pressures on salary and wages, and our ongoing
investment in editorial, technology, infrastructure and people.
Despite the impact of investments and inflation combined with the
initial dilutive impact of acquisitions, the Group has delivered an
improved adjusted operating margin of 33% (FY 2021: 32%). This is a
testament of the strength of the platform and the ability to create
operating leverage. As a result, adjusted operating profit
increased by GBP75.9m to GBP271.7m (FY 2021: GBP195.8m) driven by
both organic profit growth and contributions from acquisitions.
Statutory operating profit increased by GBP73.3m to GBP188.6m (FY
2021: GBP115.3m) and statutory operating margin improved to 23% (FY
2021: 19%) driven by the performance in adjusted operating profit
combined with lower relative adjusting items.
Earnings per share
FY 2022 FY 2021
---------------------------------------------- -------- --------
Basic earnings per share (p) 101.4 59.3
Adjusted basic earnings per share (p) 164.4 134.6
Diluted earnings per share (p) 100.9 58.1
Adjusted diluted basic earnings per share (p) 163.5 131.9
---------------------------------------------- -------- --------
Basic earnings per share are calculated using the weighted
average number of ordinary shares in issue during the period of
120.5m (FY 2021: 111.5m), the increase reflecting the weighted
impact of the issue of 22.6m shares to fund the acquisition of GoCo
in the prior year.
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, exceptional items,
amortisation of intangible assets arising on acquisitions and any
related tax effects. Adjusted profit after tax was GBP198.1m (FY
2021: GBP150.0m).
Exceptional items
Exceptional items include acquisition and integration related
costs of GBP4.7m including GBP2.9m and GBP1.2m relating to the
Dennis and Who What Wear acquisitions respectively, in addition to
GBP1.7m and GBP0.6m of restructuring costs attributable to the
review of titles in our portfolio and building of a finance centre
of excellence in Bath (2021: GBP13.1m in respect of the GoCo
acquisition and GBP4.5m in respect of the Dennis acquisition). A
total of GBP10.9m has been recognised in respect of onerous
properties, partly reflecting extended time frames in subletting
existing onerous property leases as well as GBP5.7m relating to
properties acquired as part of the Dennis acquisition (2021:
GBP1.0m net expense on the exit of onerous properties).
During 2021, the impairment charge of GBP8.8m related to a
write-down of the brand and customer relationship intangible assets
relating to Look After My Bills ('LAMB') which was acquired as part
of the GoCo acquisition, by GBP4.4m each respectively, as a result
of turbulence in the UK energy market which directly impacted the
auto-switch service offering.
Other adjusting items
Acquired amortisation increased by GBP20.0m to GBP58.3m (FY
2021: GBP38.3m) reflecting amortisation arising from the in-year
acquisitions of Dennis, What Culture and Who What Wear and the
acquisition of GoCo in FY2021.
Share-based payment expenses (relating to equity-settled share
awards with vesting periods longer than 12 months), together with
associated social security costs decreased by GBP7.9m to GBP6.9m
(FY 2021: GBP14.8m). The nature of the scheme means that a charge
is booked irrespective of the likelihood of achieving the vesting
targets, however, this was mitigated by a reduction for expected
associated employers' national insurance.
Net finance costs
Net finance costs increased to GBP18.6m (FY 2021: GBP7.5m) which
includes external interest payable of GBP13.6m reflecting the
drawdown of the RCF to fund the Dennis and Clique Brands Inc. (Who
What Wear) acquisitions, higher interest rates and GBP2.8m in
respect of the amortisation of arrangement fees relating to the
Group's bank facilities.
Leverage at 30 September 2022 was 1.48 times down from 1.9 times
following the Dennis acquisition on 1 October (excluding other cash
movements) (FY 2021: 0.8 times).
In November 2022, we secured a new facility of GBP400m with a
syndicate of banks and supported by a partial guarantee from UK
Export Finance, with attractive terms. Therefore, total facilities
at the end of November 2022 were GBP900m.
Including commitment fees, external interest payable in FY 2023
is expected to increase to GBP27m, reflecting a blended interest
rate of 7.2% on average gross debt of GBP378.2m. The total forecast
net finance cost for FY23 of GBP32.5m also includes GBP3.0m in
respect of amortisation of arrangement fees and GBP2.5m of IFRS16
related interest costs.
Taxation
The tax charge for the year amounted to GBP47.8m (FY 2021:
GBP41.7m), comprising a current tax charge of GBP38.3m (FY 2021:
GBP30.2m) and a deferred tax charge of GBP9.5m (FY 2021: GBP11.5m
credit). The current tax charge arises in the UK where the standard
rate of corporation tax is 19% and in the US where the Group pays a
blended Federal and State tax rate of 28%.
The Group's adjusted effective tax rate is 21.75% (FY 2021:
20.30%).
The Group's statutory effective tax rate is 28.12% (FY 2021:
28.69%) with the difference between the statutory rate and adjusted
effective rates attributable to movements on the Group's
share-based payments and other non-deductible costs.
The Group's deferred tax liability increased by GBP63.7m to
GBP130.2m (FY 2021: GBP66.5m) mainly as a result of the deferred
tax liabilities recognised in respect of the acquisition of Dennis
and Who What Wear.
For FY2023, the Group expects adjusted tax rate to be at
24%.
Dividend
The Board is recommending a final dividend of 3.4p per share for
the year ended 30 September 2022, payable on 14 February 2023 to
all shareholders on the register at close of business on 20 January
2023.
Balance sheet
Property, plant and equipment increased by GBP5.6m to GBP53.0m
in the period (FY 2021: GBP47.4m) reflecting the acquisition of
Dennis (GBP13.2m) and acquisition of Who What Wear (GBP5.0m) offset
by depreciation (GBP9.1m) and impairment of right of use assets
(GBP6.6m), primarily attributable to property leases inherited via
the acquisition of Dennis (included within exceptionals).
Intangible assets increased by GBP561.1m to GBP1,715.8m (FY
2021: GBP1,154.7m) mainly reflecting the in-year acquisitions of
Dennis, WhatCulture, Waive and Who What Wear (GBP513.8m) and
capitalisation of website development costs (GBP9.0m) offset by
amortisation (GBP71.3m) and the impact of FX (GBP109.6m).
Trade and other receivables increased by GBP36.3m to GBP134.3m
(FY 2021: GBP98.0m) primarily driven by the acquisition of Dennis
(GBP20.9m on acquisition) and the acquisition of Who What Wear
(GBP9.9m on acquisition).
Trade and other payables inclusive of deferred income increased
by GBP58.9m to GBP199.7m (FY 2021: GBP140.8m) primarily driven by
the acquisition of Dennis (GBP60.7m on acquisition). Provisions
increased by GBP15.3m, primarily due to the GBP10.0m provision for
legal costs being recognised on the Dennis opening balance sheet
relating to historic litigation claims.
Cash flow and net debt
Net debt at 30 September 2022 was GBP423.6m (FY 2021: GBP176.3m)
reflecting the Dennis, Waive, WhatCulture and Who What Wear
acquisitions, offset by strong cash generation.
During the year, there was a cash inflow from operations of
GBP268.5m (FY 2021: GBP197.2m) reflecting the Group's strong
trading performance.
Adjusted operating cash inflow was GBP278.8m (FY 2021:
GBP210.4m). A reconciliation of cash generated from operations to
adjusted free cash flow is included below:
FY 2022 FY 2021
GBPm GBPm
------------------------------------------------------- -------- --------
Cash generated from operations 268.5 197.2
Cash flows related to exceptional items 13.7 22.7
Settlement of employer's NI on share based payments(1) 2.0 (3.4)
Lease payments following adoption of IFRS 16
Leases (5.4) (6.1)
------------------------------------------------------- -------- --------
Adjusted operating cash inflow 278.8 210.4
Cash flows related to capital expenditure (11.6) (11.1)
------------------------------------------------------- -------- --------
Adjusted free cash flow 267.2 199.3
------------------------------------------------------- -------- --------
(1) Relating to equity-settled share awards with vesting periods
longer than 12 months.
Other significant movements in cash flows include GBP11.6m (FY
2021: GBP11.1m) of capital expenditure, net repayment of bank loans
and overdraft (net of arrangement fees) of GBP372.3m, with
GBP298.6m relating to debt settled on completion of the Dennis
acquisition and the balance reflecting the Group's strong cash
generation (FY 2021: net drawdown of GBP334.8m) and lease payments
of GBP5.4m (FY 2021: GBP6.1m). The Group paid a dividend in the
period of GBP3.4m (FY 2021: GBP1.6m). Foreign exchange and other
movements accounted for the balance of cash flows.
Adjusted free cash flow increased to GBP267.2m (FY 2021:
GBP199.3m), representing 98% of adjusted operating profit (FY 2021:
102%), 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, and include the impact of
the increase in the Group's facilities of GBP240m, following the
completion of a GBP400m UK Export Finance facility in November 2022
and the subsequent immediate repayment of the term loan. These
scenarios confirm that even in the most severe but plausible
downside scenarios, the Group is able to generate profits and
positive cash flows.
At the period end the Group had net current liabilities of
GBP115.3m (FY 2021: net current assets of GBP234.9m or net current
liabilities of GBP65.1m on an underlying basis if the cash related
to the Dennis acquisition is excluded). This is primarily driven by
the current portion of the term loan (GBP79.5m), deferred income of
GBP55.8m (which is materially higher following the acquisition of
Dennis) 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.
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 FY 2022 results.
Consolidated income statement
for the year ended 30 September 2022
2022 2021
-------------------- ----- ---------- ------------ ---------- ---------- ------------ ----------
Note Non -GAAP Non -GAAP
Adjusted Adjusting Statutory Adjusted Adjusting Statutory
results items results results items results
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------- ----- ---------- ------------ ---------- ---------- ------------ ----------
Revenue 1,2 825.4 - 825.4 606.8 - 606.8
Net operating
expenses 3 (553.7) (83.1) (636.8) (411.0) (80.5) (491.5)
-------------------- ----- ---------- ------------ ---------- ---------- ------------ ----------
Operating profit 271.7 (83.1) 188.6 195.8 (80.5) 115.3
-------------------- ----- ---------- ------------ ---------- ---------- ------------ ----------
Finance income 5 0.1 - 0.1 0.3 - 0.3
Finance costs 5 (18.7) - (18.7) (7.8) - (7.8)
-------------------- ----- ---------- ------------ ---------- ---------- ------------ ----------
Net finance costs (18.6) - (18.6) (7.5) - (7.5)
-------------------- ----- ---------- ------------ ---------- ---------- ------------ ----------
Profit before
tax 1 253.1 (83.1) 170.0 188.3 (80.5) 107.8
Tax (charge)/credit 6 (55.0) 7.2 (47.8) (38.3) (3.4) (41.7)
-------------------- ----- ---------- ------------ ---------- ---------- ------------ ----------
Profit for the
year attributable
to owners of the
parent 198.1 (75.9) 122.2 150.0 (83.9) 66.1
-------------------- ----- ---------- ------------ ---------- ---------- ------------ ----------
Earnings Ordinary share
Note 2022 2021
pence pence
--------------------------- ----- ------- -------
Basic earnings per share 8 101.4 59.3
--------------------------- ----- ------- -------
Diluted earnings per share 8 100.9 58.1
--------------------------- ----- ------- -------
Consolidated statement of comprehensive income
for the year ended 30 September 2022
2022 2021
GBPm GBPm
----------------------------------------------------- ------ ------
Profit for the year 122.2 66.1
----------------------------------------------------- ------ ------
Items that may be reclassified to the consolidated
income statement
Currency translation differences 80.8 (12.3)
----------------------------------------------------- ------ ------
Other comprehensive income/(expense) for the year 80.8 (12.3)
----------------------------------------------------- ------ ------
Total comprehensive income for the year attributable
to owners of the parent 203.0 53.8
----------------------------------------------------- ------ ------
Consolidated statement of changes in equity
for the year ended 30 September 2022
Issued Share Accumulated
share premium Merger Treasury exchange Retained Total
capital account reserve reserve differences earnings/(losses equity
Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------- ------- --------- --------- ---------- ----------- ------------- ----------------- ---------
Balance at 30
September
2020 14.7 197.0 170.9 (8.8) 2.2 5.3 381.3
----------------- ------- --------- --------- ---------- ----------- ------------- ----------------- ---------
Profit for the
year - - - - - 66.1 66.1
----------------- ------- --------- --------- ---------- ----------- ------------- ----------------- ---------
Currency
translation
differences (net
of tax) - - - - (12.3) - (12.3)
----------------- ------- --------- --------- ---------- ----------- ------------- ----------------- ---------
Other
comprehensive
expense for the
year - - - - (12.3) - (12.3)
----------------- ------- --------- --------- ---------- ----------- ------------- ----------------- ---------
Total
comprehensive
income for the
year - - - - (12.3) 66.1 53.8
Share capital
issued
during the year 14 3.4 - 411.0 - - - 414.4
Acquisition of
own
shares - - - (4.9) - - (4.9)
Share schemes
- Issue of
treasury
shares
to employees - - - 6.1 - (6.1) -
- Share-based
payments - - - - - 10.0 10.0
- Current tax on
options - - - - - (2.4) (2.4)
- Deferred tax on
options - - - - - 11.7 11.7
Dividends paid to
shareholders 7 - - - - - (1.6) (1.6)
----------------- ------- --------- --------- ---------- ----------- ------------- ----------------- ---------
Balance at 30
September
2021 18.1 197.0 581.9 (7.6) (10.1) 83.0 862.3
----------------- ------- --------- --------- ---------- ----------- ------------- ----------------- ---------
Profit for the
year - - - - - 122.2 122.2
----------------- ------- --------- --------- ---------- ----------- ------------- ----------------- ---------
Currency
translation
differences (net
of tax) - - - - 80.8 - 80.8
----------------- ------- --------- --------- ---------- ----------- ------------- ----------------- ---------
Other
comprehensive
expense for the
year - - - - 80.8 - 80.8
----------------- ------- --------- --------- ---------- ----------- ------------- ----------------- ---------
Total
comprehensive
income for the
year - - - - 80.8 122.2 203.0
Acquisition of
own
shares - - - (7.9) - - (7.9)
Share schemes
- Issue of
treasury
shares
to employees - - - 7.5 - (7.5) -
- Share-based
payments - - - - - 11.3 11.3
- Current tax on
options - - - - - 3.1 3.1
- Deferred tax on
options - - - - - (7.7) (7.7)
Dividends paid to
shareholders 7 - - - - - (3.4) (3.4)
----------------- ------- --------- --------- ---------- ----------- ------------- ----------------- ---------
Balance at 30
September
2022 18.1 197.0 581.9 (8.0) 70.7 201.0 1,060.7
----------------- ------- --------- --------- ---------- ----------- ------------- ----------------- ---------
Consolidated balance sheet
as at 30 September 2022
2022 2021
Note GBPm GBPm
------------------------------------------ ------ ------- -------
Assets
Non-current assets
Property, plant and equipment 53.0 47.4
Intangible assets - goodwill 9 1,069.6 688.2
Intangible assets - other 9 646.2 466.5
Deferred tax - 3.8
------------------------------------------ ------ ------- -------
Total non-current assets 1,768.8 1,205.9
------------------------------------------ ------ ------- -------
Current assets
Inventories 1.2 1.0
Corporation tax recoverable 13.4 -
Deferred tax 5.1 -
Trade and other receivables 134.3 98.0
Cash and cash equivalents 10 29.2 324.3
Finance lease receivable 6.1 1.9
------------------------------------------ ------ ------- -------
Total current assets 189.3 425.2
------------------------------------------ ------ ------- -------
Total assets 1,958.1 1,631.1
------------------------------------------ ------ ------- -------
Equity and liabilities
Equity
Issued share capital 14 18.1 18.1
Share premium account 197.0 197.0
Merger reserve 581.9 581.9
Treasury reserve (8.0) (7.6)
Accumulated exchange differences 70.7 (10.1)
Retained earnings 201.0 83.0
------------------------------------------ ------ ------- -------
Total equity 1,060.7 862.3
------------------------------------------ ------ ------- -------
Non-current liabilities
Financial liabilities - interest-bearing
loans and borrowings 11 369.0 458.1
Lease liability due in more than one year 55.8 44.0
Deferred tax 131.7 70.3
Provisions 12 21.4 6.1
Deferred income 14.9 -
------------------------------------------ ------ ------- -------
Total non-current liabilities 592.8 578.5
------------------------------------------ ------ ------- -------
Current liabilities
Financial liabilities - interest-bearing
loans and borrowings 11 83.8 42.5
Trade and other payables 143.8 133.7
Deferred income 55.8 7.1
Corporation tax payable 1.0 2.1
Lease liability due within one year 12.1 4.9
Deferred consideration 4.5 -
Deferred Tax 3.6 -
------------------------------------------ ------ ------- -------
Total current liabilities 304.6 190.3
------------------------------------------ ------ ------- -------
Total liabilities 897.4 768.8
------------------------------------------ ------ ------- -------
Total equity and liabilities 1,958.1 1,631.1
------------------------------------------ ------ ------- -------
Consolidated cash flow statement
for the year ended 30 September 2022
2022 2021
GBPm GBPm
------------------------------------------------------ ------- -------
Cash flows from operating activities
Cash generated from operations 268.5 197.2
Net interest paid on bank facilities (13.7) (4.9)
Interest paid on lease liabilities (2.1) (0.9)
Tax paid (50.1) (25.7)
------------------------------------------------------ ------- -------
Net cash generated from operating activities 202.6 165.7
------------------------------------------------------ ------- -------
Cash flows from investing activities
Purchase of property, plant and equipment (2.6) (3.7)
Purchase of computer software and website development (9.0) (7.4)
Purchase of subsidiary undertakings, net of cash
acquired (113.1) (169.3)
Settlement of receivable from sellers 8.0 -
Net cash used in investing activities (116.7) (180.4)
------------------------------------------------------ ------- -------
Cash flows from financing activities
Costs of share issue - (0.7)
Acquisition of own shares (7.9) (4.9)
Drawdown of bank loans 95.7 559.4
Repayment of bank loans (467.1) (213.6)
Drawdown/(repayment) of overdraft 1.0 (4.6)
Bank arrangement fees (1.9) (6.4)
Repayment of principal element of lease liabilities (5.4) (6.1)
Dividends paid (3.4) (1.6)
------------------------------------------------------ ------- -------
Net cash generated from financing activities (389.0) 321.5
------------------------------------------------------ ------- -------
Net increase in cash and cash equivalents (303.1) 306.8
Cash and cash equivalents at beginning of year 324.3 19.3
Effects of exchange rate changes on cash and cash
equivalents 8.0 (1.8)
------------------------------------------------------ ------- -------
Cash and cash equivalents at end of year 29.2 324.3
------------------------------------------------------ ------- -------
Notes to the consolidated cash flow statement
for the year ended 30 September 2022
A. Cash generated from operations
The reconciliation of profit for the year to cash generated from
operations is set out below:
2022 2021
GBPm GBPm
-------------------------------------------- ------- ------
Profit for the year 122.2 66.1
-------------------------------------------- ------- ------
Adjustments for:
Depreciation 9.1 8.7
Impairment charge on tangible assets 6.6 1.0
Amortisation of intangible assets 71.3 48.7
Impairment charge on intangible assets - 8.8
Share-based payments 11.3 10.0
Net finance costs 18.6 7.5
Tax charge 47.8 41.7
Cash generated from operations before
changes in working capital and provisions 286.9 192.5
-------------------------------------------- ------- ------
Movement in provisions 0.5 0.2
Increase in inventories (0.2) (0.2)
(Increase)/decrease in trade and other
receivables (3.8) 8.9
Decrease in trade and other payables (14.9) (4.2)
-------------------------------------------- ------- ------
Cash generated from operations 268.5 197.2
-------------------------------------------- ------- ------
B. Analysis of net debt
Other
1 October Cash On non-cash Exchange 30 September
2021 flows acquisition changes movements 2022
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------- ------------- -------- ------------- ---------- ----------- -------------
Cash and cash equivalents 324.3 (316.1) 13.0 - 8.0 29.2
Debt due within
one year (42.5) (38.3) (2.4) (0.6) - (83.8)
Debt due after more
than one year (458.1) 410.8 (296.2) (2.2) (23.3) (369.0)
------------------------------- -------- -------- ------------- ---------- ----------- -------------
Net debt (176.3) 56.4 (285.6) (2.8) (15.3) (423.6)
------------------------------- -------- -------- ------------- ---------- ----------- -------------
Other
1 October Cash On non-cash Exchange 30 September
2020 flows acquisition changes movements 2021
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------ -------- ------------- ---------- ----------- -------------
Cash and cash equivalents 19.3 293.5 13.3 - (1.8) 324.3
Debt due within
one year (7.8) (31.4) (3.2) (0.1) - (42.5)
Debt due after more
than one year (73.6) (303.2) (80.0) (1.6) 0.3 (458.1)
---------------------------- ------- -------- ------------- ---------- ----------- -------------
Net debt (62.1) (41.1) (69.9) (1.7) (1.5) (176.3)
---------------------------- ------- -------- ------------- ---------- ----------- -------------
C. Reconciliation of movement in net debt
2022 2021
GBPm GBPm
-------------------------------------------------- -------- --------
Net debt at start of year (176.3) (62.1)
(Decrease)/increase in cash and cash equivalents (303.1) 306.8
Decrease/(increase) in borrowings 73.9 (417.8)
Other non-cash changes (2.8) (1.7)
Exchange movements (15.3) (1.5)
-------------------------------------------------- -------- --------
Net debt at end of year (423.6) (176.3)
-------------------------------------------------- -------- --------
Accounting policies
Compliance statement and basis of preparation
Future plc (the Company) is incorporated and registered in
England and Wales and is a public company limited by shares. The
financial statements consolidate those of Future plc and its
subsidiaries (the Group).
The Consolidated Financial Statements have been prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and UK adopted
IFRSs. The principal accounting policies have been applied
consistently to all years presented, unless otherwise stated below.
These financial statements have been prepared under the historical
cost convention, except for contingent and deferred consideration,
which is measured at fair value.
The going concern basis has been adopted in preparing these
financial statements.
Status of this preliminary announcement
The financial information contained in this audited preliminary
announcement does not constitute the Company's statutory accounts
for the years ended 30 September 2022 or 2021. Statutory accounts
for 2021, which were prepared under International Financial
Reporting Standards as adopted by the EU, have been delivered to
the registrar of companies, and those for 2022 will be delivered in
due course. Full financial statements for the year ended 30
September 2022 will shortly be posted to shareholders.
New or revised accounting standards and interpretations adopted
in the year
The following standards and amendments became effective in the
year:
- amendments to IFRS 4, IFRS 7, IFRS 9, IFRS 16 and IAS 39
regarding replacement issues in the context of the IBOR reform;
and
- amendments to IFRS 16 relating to the extension of the
exemption from assessing whether a COVID-19 related rent concession
is a lease modification.
There has been no material impact from the adoption of new
standards, amendments to standards or interpretations which are
relevant to the Group.
New accounting standards, amendments and interpretations that
are issued but not yet applied by the Group
Certain new standards, amendments and interpretations to
existing standards have been published that are mandatory for
accounting periods beginning on or after 1 October 2022 and which
the Group has chosen not to adopt early. These include the
following standards which are relevant to the Group:
- 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 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 does not expect that the standards and amendments
issued but not yet effective will have a material impact on results
or net assets.
Presentation of non-statutory measures
The Directors believe that adjusted results and adjusted
earnings per share provide additional useful information on the
core operational performance of the Group to shareholders, and
review the results of the Group on an adjusted basis internally.
The term 'adjusted' is not a defined term under IFRS and may not
therefore be comparable with similarly titled profit measurements
reported by other companies. It is not intended to be a substitute
for, or superior to, IFRS measurements of profit.
Adjustments are made in respect of:
Share-based payments - share-based payment expenses (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.
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. The prior year impairment
charge recognised in respect of acquired intangible assets have
been excluded from the adjusted results of the Group and included
within exceptional items as they are non-cash and related to
acquired intangible assets for which amortisation is already
considered to be an adjusting item. As such it was not considered
to be reflective of the core trading performance of the Group.
Details of exceptional items are shown in note 4.
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.
The following adjustment is only relevant in the context of the
prior year results:
Impact of the UK tax rate change - this was substantively
enacted in the UK in May 2021 and resulted in tax rates increasing
from 19% to 25% in 2023. This was excluded from the adjusted
results of the Group as it resulted in a one-off non-cash impact on
the Group's deferred tax balances and would have otherwise
significantly distorted the Group's core tax charge.
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, 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 that would otherwise distort the
users understanding of the Group's performance. In the prior year
this also excludes the impact of the UK tax rate change and
impairment charge in respect of acquired intangible assets.
A summary table of all measures is included below:
Closest Definition
APM equivalent
statutory
measure
--------------- ---------------- -------------------------------------------------
Adjusted Operating Adjusted operating profit represents earnings
operating profit before share-based payments (relating to
profit equity-settled awards with vesting periods
longer than 12 months) and related social
security costs, amortisation of acquired
intangible assets 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 Adjusted profit before tax represents earnings
profit before before before share-based payments (relating to
tax tax equity-settled awards with vesting periods
longer than 12 months) and related social
security costs, interest, tax, amortisation
of acquired intangible assets, exceptional
items, and any related tax effects.
Adjusting items are shown in the table below
and defined in the commentary.
Adjusted Diluted Adjusted diluted earnings per share (EPS)
diluted earnings represents adjusted profit after tax divided
earnings per share by the weighted average dilutive number of
per share 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 8.
Adjusted Effective Adjusted effective tax rate is defined as
effective tax rate the effective tax rate adjusted for the tax
tax rate impact of adjusting items and any other one-off
impacts that distort a user's view of the
tax charge that would be expected to arise
on the core trading profit of the Group on
a recurring basis. The tax impact of adjusting
items is provided in note 6.
Adjusted Operating Adjusted operating cash flow represents cash
operating cash flow generated from operations adjusted to exclude
cash flow cash flows relating to 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 Adjusted free cash flow is defined as adjusted
free cash flow operating cash flow less capital expenditure.
flow Capital expenditure is defined as cashflows
relating to the purchase of property, plant
and equipment and purchase of computer software
and website development.
Net debt The aggregation Net debt is defined as the aggregate of the
of cash Group's cash and cash equivalents and its
and debt 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:
2022 2021
GBPm GBPm
--------------------------------------- ------ ------
Adjusted operating profit 271.7 195.8
Adjusted net finance costs (18.6) (7.5)
Adjusted profit before tax 253.1 188.3
Adjusting items:
Share-based payments (including social
security costs) (6.9) (14.8)
Exceptional items (note 4) (17.9) (27.4)
Amortisation of acquired intangibles (58.3) (38.3)
Profit before tax 170.0 107.8
--------------------------------------- ------ ------
A reconciliation between adjusted and statutory earnings per
share measures is shown in note 8.
Notes
1. Segmental reporting
The Group is organised and arranged primarily by reportable
segment. The Executive Directors consider the performance of the
business from a geographical perspective, namely the UK and the US.
The Australian business is considered to be part of the UK segment
and is not reported separately due to its size. 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
2022 2021
Sub-segment GBPm Sub-segment GBPm
--------- -------------------------- ------ ------------------------------ ------
Media Magazines Total Media Magazines Total
GBPm GBPm GBPm GBPm GBPm GBPm
--------- --------- --------------- ------ ----------- ----------------- ------
Segment:
UK 284.2 215.3 499.5 220.4 176.2 396.6
US 251.0 74.9 325.9 202.4 7.8 210.2
--------- --------- --------------- ------ ----------- ----------------- ------
Total 535.2 290.2 825.4 422.8 184.0 606.8
--------- --------- --------------- ------ ----------- ----------------- ------
Transactions between segments are carried out at arm's
length.
(ii) Segment adjusted operating profit
Adjusted operating profit is used by the Executive Directors to
assess the performance of each segment. Operating profit for the
Media and Magazines sub-segments is not reported internally, as
overheads are not fully allocated on this basis. The table below
shows the impact of intra-group adjustments on the adjusted
operating profit for the UK and US segments:
2022 2021
GBPm GBPm
------ ------------------- ------------- ----------- ------------------- ------------- -----------
Adjusted operating Adjusted operating
profit prior to Adjusted profit prior Adjusted
intra-group Intra-group operating to intra-group Intra-group operating
adjustments adjustments profit adjustments adjustments profit
GBPm GBPm GBPm GBPm GBPm GBPm
------ ------------------- ------------- ----------- ------------------- ------------- -----------
UK 60.5 88.2 148.7 64.9 68.7 133.6
US 211.2 (88.2) 123.0 130.9 (68.7) 62.2
------ ------------------- ------------- ----------- ------------------- ------------- -----------
Total 271.7 - 271.7 195.8 - 195.8
------ ------------------- ------------- ----------- ------------------- ------------- -----------
Intra-group adjustments relate to the net impact of charges from
the UK to the US in respect of management fees (for back office
revenue functions such as finance, HR and IT which are largely
based in the UK) and licence fees for the use of intellectual
property. The increase in the year is driven by the increased
operating margin achieved by the Group and the growth in media
revenue in the US following acquisitions.
A reconciliation of total segment adjusted operating profit to
profit before tax is provided as follows:
2022 2021
GBPm GBPm
------------------------------------------------------- ------ ------
Adjusted operating profit 271.7 195.8
Share-based payments (including social security costs) (6.9) (14.8)
Amortisation of acquired intangibles (58.3) (38.3)
Exceptional items (note 4) (17.9) (27.4)
Net finance costs (18.6) (7.5)
Profit before tax 170.0 107.8
------------------------------------------------------- ------ ------
(b) Business segment
(i) Gross profit by business segment
2022 2021
Sub-segment GBPm Sub-segment GBPm
------ ------ ---------- ----------------------- ------ ------ ---------- ----------------------- ------
Add back Add back
distribution distribution
Media Magazines Other expenses Total Media Magazines Other expenses Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------ ------ ---------- ------- -------------- ------ ------ ---------- ------- -------------- ------
Segment:
UK 203.3 127.5 (136.2) 31.1 225.7 163.5 109.4 (114.1) 21.3 180.1
US 224.0 54.3 (80.8) 11.4 208.9 182.6 4.4 (44.8) 1.7 143.9
------ ------ ---------- ------- -------------- ------ ------ ---------- ------- -------------- ------
Total 427.3 181.8 (217.0) 42.5 434.6 346.1 113.8 (158.9) 23.0 324.0
------ ------ ---------- ------- -------------- ------ ------ ---------- ------- -------------- ------
No end-customer, or other single customer or group of customers
under common control contributed 10% or more to the Group's revenue
in either the current or prior year. The above analysis excludes
the impact of intra-group adjustments.
2. Revenue
The Group applies IFRS 15 Revenue from contracts with customers.
See note 1 for disaggregation of revenue by sub-segment.
Timing of satisfaction of performance obligations
Revenue is recognised in the income statement when control
passes to the customer. If the customer simultaneously receives and
consumes the benefits of the contract, revenue is recognised over
time. Otherwise, revenue is recognised at a point in time.
The table below disaggregates revenue according to the timing of
satisfaction of performance obligations:
2022 2021
GBPm GBPm
-------------- ----- -------- -------- ----- -------- --------
Over Point in Total Over Point in Total
time time revenue time time revenue
GBPm GBPm GBPm GBPm GBPm GBPm
-------------- ----- -------- -------- ----- -------- --------
Total revenue 16.2 809.2 825.4 13.8 593.0 606.8
-------------- ----- -------- -------- ----- -------- --------
3. Net operating expenses
Operating profit is stated after charging:
2022 2021
Adjusted Adjusting Statutory Adjusted Adjusting Statutory
results items results results items results
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- ----------- ------------ ----------- --------- ------------ -----------
Cost of sales (390.7) - (390.7) (282.8) - (282.8)
Distribution expenses (42.5) - (42.5) (23.0) - (23.0)
Share-based payments (including
social security costs) (0.5) (6.9) (7.4) (1.2) (14.8) (16.0)
Exceptional items (note 4) - (17.9) (17.9) - (27.4) (27.4)
Depreciation (9.1) - (9.1) (8.7) - (8.7)
Amortisation (13.0) (58.3) (71.3) (10.4) (38.3) (48.7)
Other administration expenses (97.9) - (97.9) (84.9) - (84.9)
-------------------------------- ----------- ------------ ----------- --------- ------------ -----------
(553.7) (83.1) (636.8) (411.0) (80.5) (491.5)
-------------------------------- ----------- ------------ ----------- --------- ------------ -----------
4. Exceptional items
2022 2021
GBPm GBPm
------------------------------------------ ------ ------
Acquisition and integration related costs 4.7 18.6
Restructuring costs 2.3 -
Onerous property costs 10.9 -
Impairment of intangible assets - 8.8
Total charge 17.9 27.4
------------------------------------------ ------ ------
Exceptional items include acquisition and integration related
costs of GBP4.7m including GBP2.9m and GBP1.2m relating to the
Dennis and Who What Wear acquisitions respectively, in addition to
GBP1.7m and GBP0.6m of restructuring costs attributable to the
review of titles in our portfolio and building of a finance centre
of excellence in Bath (2021: GBP13.1m in respect of the GoCo
acquisition and GBP4.5m in respect of the Dennis acquisition). A
total of GBP10.9m has been recognised in respect of onerous
properties, partly reflecting extended time frames in subletting
existing onerous property leases as well as GBP5.7m relating to
properties acquired as part of the Dennis acquisition (2021:
GBP1.0m net expense on the exit of onerous properties).
Further details in respect of the acquisitions are shown in note
18.
During 2021 the impairment charge of GBP8.8m related to a write
down of the brand and customer relationship intangible assets
relating to Look After My Bills ('LAMB') which was acquired as part
of the GoCo acquisition, by GBP4.4m each respectively, as a result
of turbulence in the UK energy market which directly impacted the
auto-switch service offering.
5. Finance income and costs
2022 2021
GBPm GBPm
---------------------------------------------------------- ------ ------
Interest receivable on interest-bearing loans and
borrowings - 0.2
Interest receivable on sub-leases 0.1 0.1
Total reported finance income 0.1 0.3
Interest payable on interest-bearing loans and borrowings (13.6) (5.1)
Amortisation of bank loan arrangement fees (2.8) (1.7)
Interest payable on lease liabilities (2.3) (1.0)
Total reported finance costs (18.7) (7.8)
---------------------------------------------------------- ------ ------
Net finance costs (18.6) (7.5)
---------------------------------------------------------- ------ ------
For further information in respect of the Group's debt
facilities and changes during the year see note 11.
6. Tax on profit
The tax charged in the consolidated income statement is analysed
below:
2022 2021
GBPm GBPm
--------------------------------------------------- ------ ------
Corporation tax
Current tax on the profit for the year 43.6 30.5
Adjustments in respect of previous years (5.3) (0.3)
--------------------------------------------------- ------ ------
Current tax charge 38.3 30.2
--------------------------------------------------- ------ ------
Deferred tax origination and reversal of temporary
differences
Current year charge 7.8 13.9
Adjustments in respect of previous years 1.7 (2.4)
--------------------------------------------------- ------ ------
Deferred tax charge 9.5 11.5
--------------------------------------------------- ------ ------
Total tax charge 47.8 41.7
--------------------------------------------------- ------ ------
The tax assessed in each year differs from the standard rate of
corporation tax in the UK for the relevant year. The differences
are explained below:
2022 2021
GBPm GBPm
------------------------------------------------------ ------ ------
Profit before tax 170.0 107.8
------------------------------------------------------ ------ ------
Profit before tax at the standard UK tax rate of 19%
(2021: 19%) 32.3 20.5
Release of provision for uncertain tax positions - (1.1)
Expenses not deductible for tax purposes 1.4 2.3
Non-deductible amortisation - 0.5
Share-based payments 11.1 2.4
Effect of different rates of subsidiaries operating
in other jurisdictions 6.6 4.7
Effect of change in tax rates - 15.6
Difference in current and deferred tax rates - (0.5)
Adjustments in respect of previous years (3.6) (2.7)
------------------------------------------------------ ------ ------
Total tax charge 47.8 41.7
------------------------------------------------------ ------ ------
Included below is a reconciliation between the statutory and
adjusted tax charge:
2022 2021
GBPm GBPm
----------------------------------------- ------ ------
Total statutory tax charge 47.8 41.7
----------------------------------------- ------ ------
Tax effect of adjusting items:
Exceptional items 4.0 1.3
Share based payments (9.6) (1.5)
Amortisation of acquired intangibles 12.8 12.4
Adjustments in respect of previous years - (15.6)
Total adjusted tax charge 55.0 38.3
----------------------------------------- ------ ------
The Directors have assessed the Group's uncertain tax positions
and are maintaining a provision of GBP3.4m (2021: GBP3.4m). The
provision for uncertain tax positions has been recognised under IAS
12, taking into account the guidance published in IFRIC 23.
7. Dividends
Equity dividends 2022 2021
--------------------------------------------------- ----- ------
Number of shares in issue at end of year (million) 120.9 120.6
Dividends paid in year (pence per share) 2.8 1.6
--------------------------------------------------- ----- ------
Dividends paid in year (GBPm) 3.4 1.6
--------------------------------------------------- ----- ------
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.
On 29 November 2022 the Board proposed a dividend of 3.4p per
share, totalling an estimated GBP4.1m, in respect of the year ended
30 September 2022, which subject to shareholder consent at the AGM,
will be paid on 14 February 2023 to shareholders on the register at
close of business on 20 January 2023.
A dividend of 2.8p per share totalling GBP3.4m in respect of the
year ended 30 September 2021 was paid on 9 February 2022.
8. Earnings per share
2022 2021
------------------------ --------- ---------- ---------- ---------- --------- ----------
Adjusted Adjusting Statutory Adjusting Adjusted Statutory
results items results results items results
pence pence pence pence pence pence
------------------------ --------- ---------- ---------- ---------- --------- ----------
Basic earnings/(loss)
per share 164.4 (63.0) 101.4 134.6 (75.3) 59.3
Diluted earnings/(loss)
per share 163.5 (62.6) 100.9 131.9 (73.8) 58.1
------------------------ --------- ---------- ---------- ---------- --------- ----------
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 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, exceptional items,
amortisation of intangible assets arising on acquisitions and any
related tax effects. In the prior year, the results were also
adjusted for the impairment charge in respect of intangible assets
and the impact of the UK tax rate change.
2022 2021
-------------------------------------------------- ----------- -----------
Adjustments to profit after tax:
Profit after tax (GBPm) 122.2 66.1
Share-based payments (including social security
costs) (GBPm) 6.9 14.8
Exceptional items (GBPm) 17.9 27.4
Amortisation of intangible assets arising on
acquisitions (GBPm) 58.3 38.3
Tax effect of the above adjustments (GBPm) (7.2) (12.2)
Change in tax rate (GBPm) - 15.6
-------------------------------------------------- ----------- -----------
Adjusted profit after tax (GBPm) 198.1 150.0
-------------------------------------------------- ----------- -----------
Weighted average number of shares in issue during
the year:
- Basic 120,505,969 111,463,911
- Dilutive effect of share options 652,687 2,247,933
- Diluted 121,158,656 113,711,844
Basic earnings per share (in pence) 101.4 59.3
Adjusted basic earnings per share (in pence) 164.4 134.6
Diluted earnings per share (in pence) 100.9 58.1
Adjusted diluted earnings per share (in pence) 163.5 131.9
-------------------------------------------------- ----------- -----------
The adjustments to profit after tax have the
following effect:
Basic earnings per share (pence) 101.4 59.3
Share-based payments (including social security
costs) (pence) 5.7 13.3
Exceptional items (pence) 14.9 24.5
Amortisation of intangible assets arising on
acquisitions (pence) 48.4 34.4
Tax effect of the above adjustments (pence) (6.0) (10.9)
Change in tax rate (pence) - 14.0
-------------------------------------------------- ----------- -----------
Adjusted basic earnings per share (pence) 164.4 134.6
-------------------------------------------------- ----------- -----------
Diluted earnings per share (pence) 100.9 58.1
Share-based payments (including social security
costs) (pence) 5.7 13.0
Exceptional items (pence) 14.8 24.1
Amortisation of intangible assets arising on
acquisitions (pence) 48.1 33.7
Tax effect of the above adjustments (pence) (6.0) (10.7)
Change in tax rate (pence) - 13.7
-------------------------------------------------- ----------- -----------
Adjusted diluted earnings per share (pence) 163.5 131.9
-------------------------------------------------- ----------- -----------
9. Intangible assets
Other
Publishing Customer acquired
Goodwill rights Brands relationships Subscribers intangibles Other Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------- --------- ----------- ------- --------------- ------------ ------------- ------ -------
Cost
At 1 October
2020 574.3 90.5 64.3 21.7 15.6 38.4 30.0 834.8
Additions through
business combinations 384.7 - 287.7 33.5 0.1 5.3 10.1 721.4
Other additions - - - - - - 7.4 7.4
Disposal - - - - - - (0.8) (0.8)
Exchange adjustments (7.8) (0.1) (2.3) (0.7) (0.5) (1.1) (0.7) (13.2)
---------------------- --------- ----------- ------- --------------- ------------ ------------- ------ -------
At 30 September
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
---------------------- --------- ----------- ------- --------------- ------------ ------------- ------ -------
Accumulated
amortisation
and impairment
At 1 October
2020 (264.6) (13.1) (11.7) (3.6) (4.1) (21.2) (22.9) (341.2)
Charge for the
year - (9.0) (15.7) (5.8) (1.8) (6.0) (10.4) (48.7)
Impairment - - (4.4) (4.4) - - - (8.8)
Disposal - - - - - - 0.8 0.8
Exchange adjustments 1.6 0.1 0.4 0.2 0.2 0.1 0.4 3.0
---------------------- --------- ----------- ------- --------------- ------------ ------------- ------ -------
At 30 September
2021 (263.0) (22.0) (31.4) (13.6) (5.7) (27.1) (32.1) (394.9)
---------------------- --------- ----------- ------- --------------- ------------ ------------- ------ -------
Charge for the
year - (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)
---------------------- --------- ----------- ------- --------------- ------------ ------------- ------ -------
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
---------------------- --------- ----------- ------- --------------- ------------ ------------- ------ -------
Net book value
at 30 September
2021 688.2 68.4 318.3 40.9 9.5 15.5 13.9 1,154.7
---------------------- --------- ----------- ------- --------------- ------------ ------------- ------ -------
Net book value
at 1 October
2020 309.7 77.4 52.6 18.1 11.5 17.2 7.1 493.6
---------------------- --------- ----------- ------- --------------- ------------ ------------- ------ -------
Useful economic 5-15 3-20 8-10 7-11 3-15 2
lives years years years years years years
---------------------- --------- ----------- ------- --------------- ------------ ------------- ------ -------
Acquired intangibles are amortised over their estimated economic
lives, typically ranging between two and twenty years. The other
acquired intangibles category in the table above includes assets
relating to customer lists, content and websites.
Included within the summary of acquired intangible assets above
are the following individually material assets:
- GoCo brand acquired in February 2021, with a net book value
('NBV') at 30 September 2022 of GBP241.5m, a useful economic life
('UEL') of 20 years and remaining amortisation period of 18.5
years;
- GoCo customer relationships acquired as part of the GoCo
acquisition in February 2021, with a net book value ('NBV') at 30
September 2022 of GBP8.0m, a UEL of 4 years and remaining
amortisation period of 2.5 years;
- Publishing rights relating to TV Weekly magazines, acquired as
part of the TI Media acquisition in April 2020, with a net book
value ('NBV') at 30 September 2022 of GBP23.0m, a UEL of 15 years
and remaining amortisation period of 12.5 years);
- Dennis Brand acquired in October 2021, with a net book value
('NBV') at 30 September 2022 of GBP26.0m, a useful economic life
('UEL') of 20 years and remaining amortisation period of 19
years;
- Dennis subscriber relationships acquired in October 2021, with
a net book value ('NBV') at 30 September 2022 of GBP27.7m, a useful
economic life ('UEL') of 11 years and remaining amortisation period
of 10 years;
- The Week US brand acquired in October 2021, with a net book
value ('NBV') at 30 September 2022 of GBP40.6m, a useful economic
life ('UEL') of 20 years and remaining amortisation period of 19
years;
- The Week US subscriber relationships acquired in October 2021,
with a net book value ('NBV') at 30 September 2022 of GBP19.9m, a
useful economic life ('UEL') of 7 years and remaining amortisation
period of 6 years;
- Kiplinger brand acquired in October 2021, with a net book
value ('NBV') at 30 September 2022 of GBP26.5m, a useful economic
life ('UEL') of 20 years and remaining amortisation period of 19
years;
- Kiplinger subscriber relationships acquired in October 2021,
with a net book value ('NBV') at 30 September 2022 of GBP13.0m, a
useful economic life ('UEL') of 7 years and remaining amortisation
period of 6 years;
- Who What Wear brand acquired in June 2022, with a net book
value ('NBV') at 30 September 2022 of GBP35.6m, a useful economic
life ('UEL') of 15 years and remaining amortisation period of 14.75
years; and
- Who What Wear Advertising relationships acquired in June 2022,
with a net book value ('NBV') at 30 September 2022 of GBP14.1m, a
useful economic life ('UEL') of 13 years and remaining amortisation
period of 12.75 years.
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 year through business combinations are set out in note 18.
Other intangibles relate to capitalised software costs and
website development costs which are internally generated.
No reasonably possible change in assumptions would result in a
reduction of this impairment.
Amortisation is included within administration expenses in the
consolidated income statement.
Impairment assessments for goodwill
The net book value of goodwill at 30 September 2022 consists of
GBP603.0m (2021: GBP532.2m) relating to the UK, GBP453.6m (2021:
GBP143.3m) relating to the US and GBP13.0m (2021: GBP12.7m)
relating to Australia.
At 30 September 2022 the Group performed its annual impairment
assessment of goodwill and concluded that no impairment of goodwill
was required.
10. Cash and cash equivalents
Cash and cash equivalents include the following for the purposes
of the cash flow statements:
2022 2021
GBPm GBPm
-------------------------- ------ ------
Cash and cash equivalents 29.2 324.3
-------------------------- ------ ------
As at 30 September 2021, the GBP300m of consideration required
to complete the Dennis acquisition had been drawn down and held in
cash in readiness for completion on 1 October 2021, of which
GBP200m was restricted specifically for the acquisition.
11. Financial liabilities - interest-bearing loans and
borrowings
Non-current liabilities
Interest rate Interest rate
at at
30 September 30 September 2022 2021
2022 2021 GBPm GBPm
------------------------- -------------- -------------- ------ ------
Sterling revolving loan 4.32% 1.83% 115.5 239.3
Sterling term loan 3.99% 1.83% 80.0 159.7
US dollar revolving loan 4.98% 1.84% 161.5 43.8
AU dollar revolving loan 4.68% 1.83% 12.0 15.3
------------------------- -------------- -------------- ------ ------
Total 369.0 458.1
------------------------- -------------- -------------- ------ ------
Current liabilities
Interest rate Interest rate
at at
30 September 30 September 2022 2021
2022 2021 GBPm GBPm
------------------------- -------------- -------------- ------ ------
Multi-currency overdraft 1.00% 1.00% 4.2 3.1
Sterling term loan 3.99% 1.83% 79.6 39.4
Total 83.8 42.5
------------------------- -------------- -------------- ------ ------
The interest-bearing liabilities are repayable as follows:
2022 2021
GBPm GBPm
--------------------------- ------ ------
Within one year 83.8 42.5
Between two and five years 369.0 458.1
--------------------------- ------ ------
Total 452.8 500.6
--------------------------- ------ ------
In July 2021, the Group undertook a further Amend & Extend
of its existing GBP350m debt facilities. The amended facilities
comprise a three-year GBP400m RCF (repayable in July 2024 but with
the ability to request two one-year extensions at lender consent),
and a GBP200m Term Loan which amortises at GBP10m in March and June
2022 and GBP20m per quarter thereafter with a final bullet payment
on expiry in June 2023 (with one six month extension option at
lender consent). The amended facility was secured at competitive
market rates, on substantially similar terms as the previous
facility, giving the Group significant headroom and flexibility to
pursue its growth strategy.
In May 2022 the Group exercised the first one year extension
option and also increased the size of its Revolving Credit Facility
('RCF') from GBP400m to GBP500m. The enlarged and extended facility
is now repayable in July 2025 and there were no changes to
covenants arising as a result. In July 2022 the Group exercised its
six month extension option on the Term Loan, taking the maturity
date of this facility out to 31 December 2023.
Interest bearing loans are shown net of unamortised issue costs
which amounted to GBP5.0m (2021: GBP5.6m).
12. Provisions
Property Other Total
GBPm GBPm GBPm
-------------------------- --------- ------ ------
At 1 October 2021 6.1 - 6.1
On acquisition 2.5 10.9 13.4
Charged in the year 3.0 - 3.0
Utilised in the year (2.5) (0.1) (2.6)
Foreign exchange movement - 1.5 1.5
-------------------------- --------- ------ ------
At 30 September 2022 9.1 12.3 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. A provision for legal costs of
GBP10.0m was recognised on the Dennis opening balance sheet
relating to historic litigation claims, which are expected to be
settled within the next 12 months.
13. Financial instruments
The Group applies IFRS 9 Financial Instruments. For the Group's
financial assets, the following table shows the measurement
categories under IFRS 9:
Financial asset IFRS 9 classification
--------------------------- ----------------------
Cash and cash equivalents Amortised cost
Trade and other receivables Amortised cost
--------------------------- ----------------------
There has not been a significant impact on the carrying amounts
of assets held.
All financial assets and liabilities are classed as level 1.
14. Issued share capital
2022 2021
---------------------------------------- -------------------- --------------------
Number Number
of GBPm of GBPm
shares shares
---------------------------------------- ----------- ------- ----------- -------
Allotted, authorised, issued and fully
paid Ordinary shares of 15p each
At 1 October 120,624,634 18.1 98,014,955 14.7
Issued as consideration for acquisition - - 22,608,736 3.4
Share scheme exercises 229,113 - - -
Share Incentive Plan matching shares 2,183 - 943 -
---------------------------------------- ----------- ------- ----------- -------
At 30 September 120,855,930 18.1 120,624,634 18.1
---------------------------------------- ----------- ------- ----------- -------
During the year 229,113 Ordinary shares with a nominal value of
GBP34,367 were issued by the Company pursuant to share scheme
exercises throughout the period. 2,183 Ordinary shares were issued
under the Share Incentive Plan for a combined total cash commitment
of GBPnil (2021: 943 ordinary shares, total cash commitment of
GBPnil).
In the prior year, 22,608,736 Ordinary shares were issued as
part-consideration for the acquisition of GoCo Group plc, with a
value of GBP415.1m (share price of GBP18.36).
Further details of acquisitions are shown in note 18.
15. Reserves
Share premium account
Share premium represents the excess of proceeds received over
the nominal value of new shares issued.
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 year the Company purchased 522,795 of its own shares
to fund the future vesting of share options, at a total value of
GBP7.9m and 450,404 shares held by the EBT were used to satisfy the
vesting of share options (2021: 276,132 shares were purchased, at a
total value of GBP4.9m).
Merger reserve
During the current year there was no movement on the merger
reserve. In the prior year the merger reserve increased by
GBP411.0m, consisting of GBP411.7m relating to the premium on
shares issued as consideration for the acquisition of GoCo Group
plc, offset by GBP0.7m of related share issuance costs.
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.
16. Contingent liabilities
There were no material contingent liabilities as at 30 September
2022 or 30 September 2021.
17. Related party transactions
The Group had no material transactions with related parties in
2022 or 2021 which might reasonably be expected to influence
decisions made by users of these financial statements.
18. Acquisitions
Acquisition of Dennis
On 1 October 2021, Future acquired Dennis Publishing, a leading
consumer media subscriptions business, which includes trusted
Wealth, Knowledge and B2B technology specialist titles such as
Kiplinger, MoneyWeek, The Week & IT Pro.
The consideration was GBP1.0m, however the acquired debt of
GBP298.6m was required to be repaid immediately following the
acquisition. Transaction fees of GBP4.5m were incurred as part of
the acquisition in the prior year.
The impact of the acquisition on the consolidated balance sheet
was:
Fair value
GBPm
-----------
Tangible assets
-Right-of-use lease assets 11.2
- Other tangible assets 2.0
Intangible assets
* Brand 89.5
5.9
61.9
* Advertiser relationships 1.5
0.8
0.1
* Subscriber relationships 20.9
0.5
0.4
* Software 0.6
2.2
(60.7)
Cash and cash equivalents (1.9)
Inventory (2.4)
Trade and other receivables
Finance lease receivable due within 1
year (13.4)
Corporation tax receivable (10.8)
Trade and other receivables due in more (14.1)
than 1 year (296.2)
Finance lease receivables due in more
than 1 year (26.3)
Trade and other payables
Lease liability due within one year
Financial liabilities - interest bearing
loans and borrowings
due in less than one year
Non-current liabilities
* Provisions
* Deferred income
* Lease liability due in more than one year
* Financial liabilities - interest bearing loans and
borrowings due in more than one year
Deferred tax
-------------------------------------------------------------------- -----------
Net assets acquired (228.3)
-------------------------------------------------------------------- -----------
Goodwill 229.3
-------------------------------------------------------------------- -----------
1.0
-------------------------------------------------------------------- -----------
Consideration:
Cash 1.0
-------------------------------------------------------------------- -----------
Total consideration 1.0
-------------------------------------------------------------------- -----------
The acquisition has scaled the Group's 'Wealth & Savings'
vertical, further diversified the Group's revenue by materially
increasing the Group's recurring revenues through subscriptions and
extending the Group's reach in the North American market, deepened
the Group's existing presence in the 'B2B Pro Technology' vertical
and enhanced the Group's 'Knowledge' vertical with high
subscription rates and growth potential. Goodwill is attributable
to the synergies of the combined Group and the opportunities noted
above. The intangibles recognised, including goodwill, are not
expected to be deductible for tax purposes.
At HY 2022 provisional values were included in the above. These
have since been updated and finalised to increase provisions (from
GBP7.1m to GBP13.4m) to reflect additional legal costs as well as
recognising a deferred tax asset of GBP2.7m on the basis that the
costs, once settled, are expected to be tax deductible.
Included within the Group's results for the period are revenues
of GBP129.6m from Dennis. Given that Dennis is now fully integrated
and using the Group's shared back office functions it is
impractical to disclose the profit before tax generated as it is
not monitored at this level internally.
The acquisition was completed on the first day of the financial
year and so the amounts included within the Group's results reflect
its ownership for the full period.
Gross trade receivables were GBP5.6m on acquisition, of which
GBP5.2m were expected to be recovered. The assets and liabilities
acquired included an GBP8m receivable from the sellers related to
titles not purchased.
Acquisition of WhatCulture
On 23 March 2022, the Group acquired WhatCulture, an
entertainment-based website, for total consideration of GBP22.7m.
WhatCulture further strengthens Future's position in video, notably
with its expertise in the monetisation on YouTube and will benefit
from the Future proprietary technology stack and operating model to
drive the platform effect whilst bolstering Future's gaming and
entertainment verticals, forming part of the Group's UK cash
generating unit.
The impact of the acquisition on the consolidated balance sheet
was:
Fair value
GBPm
-----------
Tangible assets
- Land and buildings 0.4
Intangible assets
- Brand 5.7
Cash 3.6
Trade and other receivables 0.5
Trade and other payables (0.1)
Deferred tax (1.4)
------------------------------ -----------
Net assets acquired 8.7
------------------------------ -----------
Goodwill 14.0
------------------------------ -----------
22.7
------------------------------ -----------
Consideration:
Cash 18.2
Deferred consideration 4.5
------------------------------ -----------
Total Consideration 22.7
------------------------------ -----------
Goodwill is attributable to the opportunities that exist to
further monetise the Group's brands and audience and is not
expected to be deductible for tax purposes.
Included within the Group's results for the period are revenues
of GBP2.1m from WhatCulture (excluding deal fees, associated
integration costs, acquired intangible amortisation and interest).
Given that WhatCulture is now fully integrated and using the
Group's shared back office functions it is impractical to disclose
the profit before tax generated as it is not monitored at this
level internally.
If the acquisition had been completed on the first day of the
financial year, it would have contributed GBP4.3m of revenue during
the period.
Gross trade receivables were GBP0.4m on acquisition, of which
GBP0.4m were expected to be recovered.
Acquisition of Who What Wear
On 15 June 2022, the Group completed the acquisition of Who What
Wear, a leading digital-only women's lifestyle publisher based in
the US from Clique Brands Inc for consideration of $127.2m.
Transaction fees of GBP1.2m were incurred as part of the
acquisition.
Who What Wear is a brand highly-regarded by both consumers and
advertisers with a strong social presence and diverse revenue
streams ranging from digital advertising to eCommerce.
The acquisition further strengthens Future's position in the
Women's Lifestyle vertical and gives the Group greater scale and
reach in North America to further monetise its audience. With
Future's content already reaching 1 in 3 adults online in the US,
the transaction will accelerate Future's scale and revenue
opportunities in the US. The Group's existing Women's Lifestyle
brands will benefit from Who What Wear's leading direct advertising
sales capabilities, whilst Who What Wear will benefit from Future's
proprietary technology stack and operating model to drive the
platform effect.
The provisional impact of the acquisition on the consolidated
balance sheet was:
Provisional
Fair value
GBPm
------------
Tangible assets
- Right-of-use lease asset 4.7
- Other tangible assets 0.3
Intangible assets
- Brand 34.2
- Advertiser relationships 12.2
- Software 0.1
Cash and cash equivalents 7.1
Trade and other receivables 9.9
Trade and other payables (6.1)
Lease liability due within one (1.1)
year
Non-current liabilities (3.6)
* Lease liability due in more than one year (11.8)
Deferred tax
------------------------------------------------------- ------------
Net assets acquired 45.9
------------------------------------------------------- ------------
Goodwill 59.3
------------------------------------------------------- ------------
105.2
------------------------------------------------------- ------------
Consideration:
Cash 105.2
------------------------------------------------------- ------------
Total Consideration 105.2
------------------------------------------------------- ------------
The values included above are considered to be final other than
the consideration (and any subsequent flow on impact to goodwill)
as completion accounts are in the process of being finalised and
agreed with the seller.
Included within the Group's results for the period are revenues
of GBP9.0m from Who What Wear (excluding deal fees, associated
integration costs, acquired intangible amortisation and interest).
Given that Who What Wear is now fully integrated and using the
Group's shared back office functions it is impractical to disclose
the profit before tax generated as it is not monitored at this
level internally.
If the acquisition had been completed on the first day of the
financial year, it would have contributed GBP33.0m of revenue
during the period.
Gross trade receivables were GBP7.8m on acquisition, of which
GBP7.5m are expected to be recovered.
19. Post balance sheet events
On 23 November 2022, the Group further extended its committed
debt facilities with a 5 year, GBP400m 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 RCF.
On signing, the first GBP160m was utilised to prepay the Groups
existing Term Loan maturing 31 December 2023.
Acquisition of ShortList Media Ltd
On 18 October 2022, we completed the acquisition of ShortList
Media Ltd (trading as Shortlist.com), a technology website, adding
the much respected technology and lifestyle brand and its archive
of hundreds of evergreen articles for consideration of GBP0.3m. We
will be able to deploy our tech stack to the website to drive
monetisation, whilst growing our online users and accelerating this
growth through our capabilities.
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END
FR PPGAWGUPPPPB
(END) Dow Jones Newswires
November 30, 2022 02:00 ET (07:00 GMT)
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