TIDMFUTR
RNS Number : 9062L
Future PLC
18 May 2022
18 May 2022
FUTURE plc
2022 HALF YEAR RESULTS
Continued strong financial and operational results, guidance
reaffirmed with acquisition providing a modest upgrade
Future plc (LSE: FUTR, "Future", "the Group"), the global
platform for specialist media, today publishes its results for the
half year ended 31 March 2022.
Highlights
Financial results for the half year ended 31 March 2022
Adjusted results (1) HY 2022 HY 2021 Var
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Adjusted operating profit (GBPm) 134.5 89.2 +51%
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Adjusted operating profit margin
(%) 33 33 -
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Adjusted diluted EPS (p) 81.3 65.4 +24%
---------------------------------- -------- -------- -----
Statutory results HY 2022 HY 2021 Var
---------------------------------- -------- -------- -----
Revenue (GBPm) 404.3 272.6 +48%
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Operating profit (GBPm) 88.4 59.7 +48%
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Profit before tax (GBPm) 81.0 56.9 +42%
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Cash generated from operations
(GBPm) 138.1 85.9 +61%
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Diluted EPS (p) 51.7 40.7 +27%
---------------------------------- -------- -------- -----
Financial highlights
-- H1 revenue up 48% to GBP404.3m (HY 2021: GBP272.6m),
reflecting a combination of continued organic(2) growth and
contribution from acquisitions, with organic(2) growth of 4% in the
half, and average(10) of the two half-years of 13%. Media
organic(2) growth was 5% in the half, a pleasing performance given
the prior year benefit from COVID (up 18% on average for the two
half-years(10) ) driven by a strong digital advertising organic(2)
growth of 10%.
-- Excellent H1 results with adjusted operating profit(1) up 51%
to GBP134.5m (HY 2021: GBP89.2m), and statutory operating profit up
48% to GBP88.4m (HY 2021: GBP59.7m).
-- Future's platform effect continues to deliver, with an
improvement in adjusted operating profit(1) margin to 33%, an
expansion of 1% over full year FY 2021 of 32% (HY 2021: 33%)
absorbing the material inflationary pressures in H1 2022 and
initial dilutive impact of acquisitions.
-- The Group remains highly cash generative with adjusted free
cash flow(3) of GBP137.8m (HY 2021: GBP93.9m), representing 102% of
adjusted operating profit(1) (HY 2021: 105%). Cash generated from
operations was GBP138.1m (HY 2021: GBP85.9m).
-- Leverage(4) of 1.46x (FY 2021: 0.8x and down from 1.9x
following the Dennis acquisition on 1 October). This reflects
continued rapid de-levering, resulting in net debt(9) at the end of
the half year of GBP388.7m (FY 2021: GBP176.3m). In May 2022, we
extended our RCF facilities by GBP100m, with total facilities of
GBP690m.
Operational and strategic highlights
-- Driving organic revenue growth through expansion of audience
in existing and new content verticals. Our leadership position
means that we are able to deliver premium monetisation and growth,
despite organic online audience declines of 10% largely due to
Covid comparators and demonstrating the resilience of the model
through economic cycles. Highlights in the first half include:
-- US audience reach increased by 2ppt year-on-year to 35% (HY
2021: 33%), on track to achieve our aim of reaching 1 in 2 in the
US in the mid term.
-- Future's consumer technology portfolio is the market leader
in the US and UK (source: ComsCore).
-- Future's newest high growth verticals have shown positive
momentum, notably in our US reach (source: ComsCore):
-- Women's Beauty & Fashion portfolio is gaining momentum
with MarieClaire featuring in the top 10 in the US and Canada.
-- Homes is now inside the top ten websites in the category, up from #19 in March 2021.
-- Strategic traction in our latest content vertical Wealth
& Savings with the addition of acquired brands including
Kiplinger and The Money Week and the fast growth of The Money Edit,
our organic launch.
-- Creating value from acquisitions with 4 acquisitions
announced 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 while remaining disciplined in approach to
leverage.
-- Our Future, Our Responsibility - our ESG strategy - was
launched in December 2021 and we are making good progress against
our ambition.
Outlook
-- A modest upgrade to our FY 2022 guidance, which reflects:
-- Ongoing resilience of the underlying business, despite the
inflationary backdrop with the Group on track to deliver
year-on-year margin progression as previously anticipated
-- A return to positive audience momentum in H2
-- Benefit of the recent acquisition of WhoWhatWear
-- 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:
"Our strategy is underpinned by our diversified revenues, our
global reach and the platform effect we generate. Through the
continued execution of our strategy, we have delivered robust
year-on-year growth despite an inflationary environment and prior
year comparators enhanced by the impact of COVID-19.
"The strength of our specialist, trusted content continues to
attract a high value audience, making us a partner of choice for
advertisers. Our newest verticals, including Homes, Women's Beauty
& Fashion, and Wealth & Savings have performed well and
generated strong brand awareness. Furthermore, our US-first mindset
continues to bear fruit, and we see vast growth potential as we aim
to reach 1 in 2 users online in the US.
"In what has been a busy period, we were delighted to acquire
and complete the integration of Dennis, and to acquire
WhatCulture.com and Waive, which add incremental value. We also
look forward to bringing our latest acquisition, WhoWhatWear, into
the Group, which enhances our leadership position in the Women's
vertical.
"We are pleased to be on track to deliver another strong
full-year of profitable growth despite the wider macroeconomic
outlook. Looking ahead, we enter H2 with positive momentum and
growing audience numbers, which further underpins our confidence
for the remainder of FY 2022."
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/62603bcf67e322082fa859c5#
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.
2) Organic growth defined as the like for like portfolio
excluding acquisitions and disposals made during HY 2021 and HY
2022 and including the impact of closures and new launches at
constant FX rates. Constant FX rates is defined as the average rate
for HY 2022.
3) Adjusted free cash flow is defined as adjusted operating cash
inflow less capital expenditure. Capital expenditure is defined as
cashflows relating to the purchase of property, plant and equipment
and purchase of computer software and website development. Adjusted
operating cash inflow represents cash generated from operations
adjusted to exclude cash flows relating to exceptional items and
payment of employer's taxes on share based payments relating to
equity settled share awards with vesting periods longer than 12
months, and to include lease repayments following adoption of IFRS
16 Leases.
4) Leverage is defined as Net debt as defined in 9) below
(excluding capitalised bank arrangement fees and including any
non-cash ancillaries), as a proportion of Adjusted EBITDA adjusted
for the impact of IFRS 16 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
before interest, tax, depreciation and amortisation adjusted for
the items referenced in 1) 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. 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.
10) Average of the two half-year organic growth being the
average of the HY 2021 organic growth rate and HY 2022 organic
growth rate.
Enquiries:
Future plc +44 (0)122 544 2244
Zillah Byng-Thorne, Chief Executive Officer
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, 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 3 million delivered
through more than 131 magazines, and 735 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 in
driving consistent quality revenue growth which translates into
operating margin and cash. Future's strategy is to have leadership
positions in the markets it operates in, expanding the reach of the
platform by entering into new audience verticals and increasing
market share in the vertical markets in which it operates through
new content topics, creating further opportunities for the
Group.
We have a relentless focus on the sustainable execution of our
strategy. Our high-quality expert content is the fuel that drives
our engine, attracting audiences to connect with our retail and
advertising partners. We are focused on 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 platform
effect.
Over the past two years, we have expanded our addressable
audience's and markets from Technology and Gaming into Women's,
Homes and Wealth & Savings. Our strategy is to grow our
audience in these vertical markets in order to take market share
and hold leadership positions. Being a market leader means that we
are 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.
Our continued focus on execution translates into a repeatable,
efficient value creation model as testifies our exceptional track
record of doubling the business approximately every two years since
2014.
Meeting our audience's needs
Meeting the needs of our audience is paramount and is at the
centre of our strategy. We are a trusted expert that helps our
audience do the things they love, including making buying
decisions.
Growing our audience is a key focus and driver of performance.
At our full year 2021 results update in 2021 we stated our medium
term goal of reaching 1 in 2 Americans online each month. It is
very pleasing that we have grown the share of US online users by
2ppt in the half, as we now reach 35% of the US online users (HY
2021: 33%), despite the challenging comparators, evidencing the US
opportunity. Overall audience declined a modest 2%, to 306m (HY
2021: 311m) on a reported basis, reflecting the impact of the
exceptional and atypical audience during 2021. As a consequence,
our average growth over the past two half years is 15%, more in
keeping with the longer term trends we have experienced. As we move
into H2, we are seeing an improvement in audience year-on-year
performance with a return to online audience growth in April and
positive momentum into Q3. These performances highlight the benefit
and strength of the content vertical diversification of the Group,
enabling us to absorb unusual market trends and continue to grow
audience share and revenues.
In Technology and Gaming, our most mature verticals, we have
continued to perform strongly in challenging market conditions with
Future remaining #1 in Technology in both the US and the UK. Our
Technology vertical was a notable beneficiary of the US stimulus
checks in HY 2021 and the lack of consoles in HY 2021 drove
exceptional audiences to our sites. Our world-class content 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). Our ability to use data and analytics,
recently bolstered by the acquisition of Waive in February 2022,
combined with the expertise of our editorial teams, reaches
high-intent audiences at scale, responding to advertisers and
eCommerce demand.
Media revenues grew organically by 18% on a two half-years
average growth with organic growth on the comparator period of 5%.
Organic growth was supported by the continued strong growth in
advertising, despite the decline in online users, demonstrating the
strong demand from advertisers for contextually relevant audiences
in a brand safe environment. Affiliate performance benefited from
product enhancements although as expected revenue was lower due to
the brought forward demand from the prior year. Events recovered
from previous years' restrictions and are seeing strong demand.
HY 2022 HY 2021 2 half-year
average
Audience (reported) +5% +7% +6%
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Online users (reported) (2)% +31% +15%
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Organic revenue growth
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Digital ads +10% +26% +18%
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Affiliates (10)% +56% +23%
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Events, digital licensing,
other online +86% (56)% +15%
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Media revenue +5% +30% +18%
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Magazine revenue +3% (15)% (6)%
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Total organic revenue growth +4% +21% +13%
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Digital advertising revenue has continued to perform strongly,
growing 10% organically in the period. The US was especially strong
with growth of 12%, underpinning the benefit of a leadership
position. Our endemic brands and global scale coupled with our
proprietary high-intent data has enabled us to leverage the
knowledge of our audience's interests, preferences and intent to
deliver a strong fundamental offering for advertisers. This has
translated into an overall yield progression of 5% year on year but
also 7% half over half. This strong result is the result of our
proprietary technology, notably through Aperture which allows the
creation of super-segments that advertisers can use to target their
specific audience. Future Studios also contribute to yield
expansion with video yield on content sites 4x the average yield
and growing by 40% organically year-on-year. The combination of
technology with our endemic sales force that can market direct
campaigns effectively with the benefit of data, scale and
leadership positions in a brand safe environment.
Affiliates revenue has seen exceptional growth over the past two
half-years with average organic growth of 23%. In the period we saw
an organic decline of 10% or GBP6m, broadly in line with the
benefit we saw from the pandemic related income of GBP5m in the
prior year that we had noted in previous results. Affiliates
benefited from a strong peak trading performance, and we have
continued to enhance our eCommerce affiliates tools to improve the
user experience and drive conversion via evergreen page
improvements, and optimisations made to Live Deals Blogs during
Peak Trading. We have continued to make progress on further
diversifying revenue with the Women's Lifestyle affiliate revenue
doubling year-on-year, and new categories such as sleep and fitness
growing strongly in the period.
Other media revenue grew by 86% organically, driven by events
which recovered in the half as restrictions were lifted. During the
period, we hosted 27 events with strong rebookings.
Magazines organic revenue growth of 3% reflected the already
mentioned unusual set of comparators vs HY 2021, and reflects a
strong recovery following the impact of store closures reducing
newsstand sales in the prior year. The average organic decline for
magazines over a two half-year period was (6)%, more in line with
our longer term trends. With the acquisition of Dennis in October
2021, subscriptions now represent 48% of the magazines division.
This adds recurring, predictable revenue with low price elasticity,
helping to mitigate the secular decline in magazines. Subscription
revenues grew organically 5% in the period and on a proforma basis
the Dennis subscription revenues grew 12%.
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, both
top and bottom lines.
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 45
sites on the Vanilla website platform (HY 2021: 40). During the
half, we have continued to enrich our data audience platform
Aperture, notably through the GoCo acquisition, which when combined
with our scale and the high-intent of our audiences, positions us
very well in an environment with increased focus on first party
data and consumer privacy. For example, using the rich first-party
data from GoCo on cars, we have created valuable segments of car
intenders enabling us to attract car advertisers to our network of
brands.
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. Quality, expert, intent
led, content is also a source of operating leverage with over 55%
of our revenue from content being produced in the prior
periods.
Our centres of excellence reduce duplications and provide access
to talent in lower cost locations, delivering efficiency of spend
and agility in an ever-changing landscape, while creating teams of
like-minded experts within the organisation. We recently announced
the opening of a new US hub based in Atlanta to create a new centre
of excellence and its proximity to universities ensures we can
attract and retain talent as we grow. The hub is now up and running
and will be the North America base for our Video content strategy.
The centre of excellence approach also enables us to share best
practices across the Group. For example, the SmartBrief email
newsletter technology is being used by GoCompare as a new marketing
channel and enabled the re-platforming of the LookAfterMyBills
proposition. There are now 260 newsletters utilising the Smartbrief
email technology platform across the Group.
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 exceptional profit
results. 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
maintain margin despite continued investment in content, people,
technology and infrastructure. Our business model allows us to
absorb salary increases to help our employees mitigate the impact
of inflation as well as cost of sales increases - some of them
temporary, notably in our magazine division.
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 25 deals
reviewed for each transaction we executed in the past 12 months as
we want to 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 continued, with the
acquisitions of GoCo and Mozo in February 2021. We now have more
opportunities to champion the needs of our customers through our
move into a new attractive content vertical of Wealth &
Savings. Leveraging industry leading technology and knowledge,
these businesses provide customers with an expert service of clear
and impartial advice, providing comparison services across the
products that meet their needs. This new vertical is in line with
the high-intent characteristic of our audiences and our purpose of
sharing our knowledge and expertise with others, helping them make
important decisions about their homes and their finances.
As we enter the second year of ownership of GoCo, we are pleased
with the performance and we have seen continued signs of success in
HY 2022. Our SEO expertise has already delivered improvement with
consistent progress on car and home insurance, combined with using
our email newsletter capability to drive further engagement. The
rich first-party data from GoCo is enriching 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 now 32% of revenue from
verticals other than car insurance (up +3ppt year on year) whilst
we have improved market shares of car insurance by 2ppt and home
insurance by 4ppt year-on-year. This has resulted in GoCompare
growing revenues at 3% in the period on a proforma basis. Finally,
the widgetisation of the comparator technology is progressing and
we are on track to launch this proposition on the Future content
websites later this year.
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.
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 double digit improvement on advertising
yield.
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 will enable the Group to scale its Wealth &
Savings vertical through the MoneyWeek and Kiplinger brands,
further diversify the Group's revenue by materially increasing the
Group's recurring revenues through subscriptions, and further
extend the Group's reach in the North American market.
The integration of Dennis has completed 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 new wealth content
to sit on other websites such as Woman&Home with its Smart With
Money channel.
Waive - strengthening data insight capabilities
In February 2022, we completed the acquisition of Waive. Waive
is 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.
WhatCulture.com - enhancing our Entertainment verticals 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.
On 10 May 2022, we announced the acquisition of WhoWhatWear, a
leading digital-only Women's lifestyle publisher. The transaction
is expected to close next month. 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 will become the 6th largest Beauty and Fashion publisher in
the US (source: ComScore). 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 WhoWhatWear's
leading direct advertising sales capabilities, whilst WhoWhatWear
will benefit from Future's proprietary technology stack and
operating model to drive the platform effect.
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.
Being a responsible employer is an important part of our
strategy and this year in January 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 will be paying our all-staff annual profit pool
bonus scheme in two instalments to help mitigate the immediate
inflationary pressures we are seeing. All colleagues except the
Executive Leadership Team will receive an initial payment
equivalent to 40% of their full-year bonus in June. Subject to
performance, the remainder of the annual profit pool bonus will be
paid after the financial year has ended.
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. The Executive Team hosted during the
period some "lunch & learn" sessions to ensure the strategy was
communicated across the Group and that all employees are part of
the delivery of Our Future, Our Responsibility.
In the period, we have used our content to help our audience
both online and in print, as part of our Expanding Horizons pillar.
This included money saving tips to help our audience during this
inflationary period as well as articles on The Week Junior to help
parents talk to their children about the war in Ukraine. As part of
Shaping the Future, we fight fake news and we now have our first
brand that obtained the NewsGuard accreditation.
Looking at the Foundation pillars, we have made significant
progress to drive a positive impact for our communities and
environment by supporting and amplifying individual fundraising
with GBP16k matched in the half (including over GBP14k for
Ukraine). Our paper is FSC & PEFC certified, we package in
recyclable materials, we recycle unsold copies and we do not use
plastic covermounts. Additionally, we have invested in 3 new data
centres 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, including zero greenhouse gas emissions in
the company's control by 2026.
Outlook
-- A modest upgrade to our FY 2022 guidance, which reflects:
-- Ongoing resilience of the underlying business, despite the
inflationary backdrop with the Group on track to deliver
year-on-year margin progression as previously anticipated
-- A return to positive audience momentum in H2
-- Benefit of the recent acquisition of WhoWhatWear
-- Longer-term, we expect that our diversified strategy will
continue to deliver, with our investment in new content verticals
and capabilities supporting our growth ambitions.
Financial summary
The financial summary is based primarily on a comparison of
results for the period ended 31 March 2021 with those for the
period ended 31 March 2022. 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 HY 2021 and HY 2022 and
including the impact of closures and new launches at constant FX
rates. Constant FX rates is defined as the average rate for HY
2022.
HY 2022 HY 2021
GBPm GBPm
-------------------------------------- -------- --------
Revenue 404.3 272.6
-------------------------------------- -------- --------
Adjusted operating profit 134.5 89.2
Adjusted profit before tax 127.1 86.4
-------------------------------------- -------- --------
Operating profit 88.4 59.7
Profit before tax 81.0 56.9
-------------------------------------- -------- --------
Basic earnings per share (p) 52.5 41.3
Diluted earnings per share (p) 51.7 40.7
Adjusted basic earnings per share (p) 82.7 66.4
Adjusted diluted earnings per share
(p) 81.3 65.4
-------------------------------------- -------- --------
The Directors believe that adjusted results provide additional
useful information on the core operational performance of the
Group, and review the results of the Group on an adjusted basis
internally. See the section below for a reconciliation between
adjusted and statutory results.
A reconciliation of adjusted operating profit to profit before
tax is shown below:
HY 2022 HY 2021
GBPm GBPm
--------------------------------------- -------- --------
Adjusted operating profit 134.5 89.2
Adjusted finance costs (7.4) (2.8)
Adjusted profit before tax 127.1 86.4
Adjusting items:
Share-based payments (including social
security costs) (3.7) (2.7)
Exceptional items (note 4) (12.2) (11.5)
Amortisation of acquired intangibles (30.2) (15.3)
Profit before tax 81.0 56.9
--------------------------------------- -------- --------
Revenue
Revenue Segment HY Segment HY
2022 2021
GBPm GBPm
------------------------------ -------------- ------ -------------- ------ ----- ---------
UK US Total UK US Total YoY Organic
GBPm GBPm GBPm GBPm GBPm GBPm Var YoY Var
------------------------------ ------ ------ ------ ------ ------ ------ ----- ---------
Digital ads 33.2 74.9 108.1 29.6 61.8 91.4 18% 10%
------------------------------ ------ ------ ------ ------ ------ ------ ----- ---------
Affiliates 96.5 42.3 138.8 41.3 43.9 85.2 63% (10%)
------------------------------ ------ ------ ------ ------ ------ ------ ----- ---------
Events, digital licensing
other online 8.9 2.8 11.7 4.4 1.6 6.0 95% 86%
------------------------------ ------ ------ ------ ------ ------ ------ ----- ---------
Total Media 138.6 120.0 258.6 75.3 107.3 182.6 42% 5%
------------------------------ ------ ------ ------ ------ ------ ------ ----- ---------
Print & digital content 84.0 29.9 113.9 63.5 1.5 65.0 75% 2%
------------------------------ ------ ------ ------ ------ ------ ------ ----- ---------
Print advertising, licensing
and other print 27.3 4.5 31.8 22.7 2.3 25.0 27% 6%
------------------------------ ------ ------ ------ ------ ------ ------ ----- ---------
Total Magazines 111.3 34.4 145.7 86.2 3.8 90.0 62% 3%
------------------------------ ------ ------ ------ ------ ------ ------ ----- ---------
Total revenue 249.9 154.4 404.3 161.5 111.1 272.6 48% 4%
------------------------------ ------ ------ ------ ------ ------ ------ ----- ---------
Group revenue increased 48% or GBP131.7m to GBP404.3m (HY 2021:
GBP272.6m), achieved organically (increase of 4% at constant
currency and 4% at actual currency) and through acquisition, with
FY 2021 and HY 2022 acquisitions net of disposals contributing
GBP144.8m to revenue in the period.
UK revenue growth of 55% or GBP88.4m to GBP249.9m (HY 2021:
GBP161.5m) included GBP28.8m of revenue from the Dennis
acquisition. Total UK organic revenues increased by 3% driven by
both Media and Magazines revenue, both up 3% in the period. UK
Media organic growth was driven by digital advertising as well as
the recovery in events which were previously impacted by the
pandemic. UK Magazines revenue grew in all categories, notably in
subscriptions.
Performance was also strong in the US where growth of 39% or
GBP43.3m to GBP154.4m (HY 2021: GBP111.1m). It included GBP34.2m of
revenue from the Dennis acquisition and was supported by organic
growth of 6% reflecting strong growth in digital advertising and a
stronger affiliates performance despite the impact of the
comparators.
Media revenue increased by GBP76.0m or 42% and by 5%
organically. Organic digital advertising revenue grew 10% despite
the impact of lower online audiences driven by an increase in yield
and organic affiliate revenue was down 10%, impacted by
COVID-boosted comparators. In the period, events recovered and grew
by 190% to over GBP5m.
Magazine revenue increased by 62% to GBP145.7m (HY 2021:
GBP90.0m), including the half-year impact of the Dennis
acquisition. Magazine organic revenue performance increased by 3%,
driven by subscriptions but also the Covid impacted comparators for
newstrade.
Included below is a reconciliation between statutory revenue and
organic revenue:
HY 2022 HY 2021
GBPm GBPm
--------- ---------
Total revenue 404.3 272.6
Revenue from HY 2022 and HY 2021 acquisitions (144.8) (23.6)
------------------------------------------------ --------- ---------
Organic revenue 259.5 249.0
------------------------------------------------ --------- ---------
Impact of FX at constant rates (0.1) (0.3)
------------------------------------------------ --------- ---------
Organic revenue at constant currency 259.4 248.7
------------------------------------------------ --------- ---------
Operating profit
Cost of sales have increased year-on-year driven by inflation,
mostly in magazines as well as costs increases on printing due to
high energy prices as well as the inclusion of acquisitions. Other
costs have increased due to continued investment in editorial,
technology, infrastructure and people. Despite the impact of
investment and inflation combined with initial dilutive impact of
acquisitions, the Group has delivered a stable margin of 33% (HY
2021: 33%). 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 GBP45.3m to GBP134.5m (HY 2021:
GBP89.2m) driven by both organic profit growth and contributions
from acquisitions. Statutory operating profit increased by GBP28.7m
to GBP88.4m (HY 2021: GBP59.7m) and statutory operating margin
stayed the same at 22% (HY 2021: 22%) driven by the performance in
adjusted operating profit.
Earnings per share
HY 2022 HY 2021
---------------------------------------------- -------- --------
Basic earnings per share (p) 52.5 41.3
Adjusted basic earnings per share (p) 82.7 66.4
Diluted earnings per share (p) 51.7 40.7
Adjusted diluted basic earnings per share (p) 81.3 65.4
---------------------------------------------- -------- --------
Basic earnings per share are calculated using the weighted
average number of ordinary shares in issue during the period of
120.5m (HY 2021: 102.8m), 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 GBP99.6m (HY
2021: GBP68.3m).
Exceptional items
Acquisition and integration related costs include GBP2.2m
relating to the Dennis acquisition (HY 2021: GBP10.2m deal fees and
GBP2.3m integration and restructuring costs primarily in respect of
the GoCo acquisition). A total of GBP10.0m has been recognised in
respect of onerous properties, partly reflecting extended time
frames in subletting existing onerous property leases arising from
M&A activity as well as GBP5.4m relating to properties acquired
as part of the Dennis acquisition.
Other adjusting items
Acquired amortisation increased by GBP14.9m to GBP30.2m (HY
2021: GBP15.3m) reflecting amortisation arising from the in-year
acquisition of Dennis and the acquisition of GoCo in H1 2021.
Share-based payment expenses (relating to equity-settled share
awards with vesting periods longer than 12 months), together with
associated social security costs increased by GBP1.0m to GBP3.7m
(HY 2021: GBP2.7m) reflecting the charge relating to the new all
staff share scheme offset by a reduction in the accrual for
employers' national insurance.
Finance costs
Finance costs increased to GBP7.4m (HY 2021: GBP2.8m) which
includes external interest payable of GBP5.2m reflecting the
drawdown of the RCF to fund the Dennis acquisition, higher interest
rates and GBP1.2m in respect of the amortisation of arrangement
fees relating to the Group's bank facilities.
Leverage at 31 March 2022 was 1.46 times down from 1.9 times
following the Dennis acquisition on 1 October (excluding other cash
movements) (FY 2021: 0.8 times).
Taxation
The tax charge for the six months ended 31 March 2022 is based
on the effective tax rate, estimated on a full year basis, being
applied to the statutory profit for the six months ended 31 March
2022. The Group's adjusted effective tax rate is 21.6% (HY 2021:
21%).
The Group's statutory effective tax rate is 21.9% (HY 2021: 26%)
with the difference between the statutory rate and adjusted
effective rate being the impact of exceptional costs, and the tax
rate differential of UK and US tax acquired intangible asset
amortisation that is excluded from adjusted profit before tax.
Balance sheet
Property, plant and equipment increased by GBP5.2m to GBP52.6m
in the period (FY 2021: GBP47.4m, HY 2021: GBP22.6m) reflecting the
acquisition of Dennis (GBP13.2m) offset by depreciation (GBP4.6m)
and impairment of right of use assets (GBP6.3)m (included within
exceptionals).
Intangible assets increased by GBP382.9m to GBP1,537.6m (FY
2021: GBP1,154.7m, HY 2021: GBP1,173.5m) mainly reflecting the
in-year acquisitions of Dennis, WhatCulture and Waive (GBP403.3m)
and capitalisation of website development costs (GBP4.5m) offset by
amortisation (GBP36.3m) and the impact of FX (GBP11.4m).
Trade and other receivables increased by GBP29.4m to GBP127.4m
(FY 2021: GBP98.0m, HY 2021: GBP105.6m) primarily driven by the
acquisition of Dennis (GBP20.9m on acquisition).
Trade and other payables increased by GBP62.5m to GBP203.3m (FY
2021: GBP140.8m, HY 2021: GBP145.8m) primarily driven by the
acquisition of Dennis (GBP60.7m on acquisition).
Cash flow and net debt
Net debt at 31 March 2022 was GBP388.7m (FY 2021: GBP176.3m, HY
2021: GBP241.3m) reflecting the Dennis, Waive and WhatCulture
acquisitions, offset by strong cash generation.
During the year, there was a cash inflow from operations of
GBP138.1m (HY 2021: GBP85.9m) reflecting the Group's strong trading
performance.
Adjusted operating cash inflow was GBP144.0m (HY 2021:
GBP98.0m). A reconciliation of cash generated from operations to
adjusted free cash flow is included below:
HY 2022 HY 2021
GBPm GBPm
------------------------------------------------------- -------- --------
Cash generated from operations 138.1 85.9
Cash flows related to exceptional items 7.2 15.3
Settlement of employer's NI on share based payments(1) 1.8 0.1
Lease payments following adoption of IFRS 16
Leases (3.1) (3.3)
------------------------------------------------------- -------- --------
Adjusted operating cash inflow 144.0 98.0
Cash flows related to capital expenditure (6.2) (4.1)
------------------------------------------------------- -------- --------
Adjusted free cash flow 137.8 93.9
------------------------------------------------------- -------- --------
(1) Relating to equity-settled share awards with vesting periods
longer than 12 months.
Other significant movements in cash flows include GBP6.2m (HY
2021: GBP4.1m) of capital expenditure, net repayment of bank loans
and overdraft (net of arrangement fees) of GBP388.9m, with
GBP298.6m relating to debt settled on completion of the Dennis
acquisition and the balance reflecting the Group's strong cash
generation (HY 2021: net drawdown of GBP99.2m) and lease payments
of GBP3.1m (HY 2021: GBP3.3m). The Group paid a dividend in the
period of GBP3.4m (HY 2021: GBP1.6m). Foreign exchange and other
movements accounted for the balance of cash flows.
Adjusted free cash flow increased to GBP137.8m (HY 2021:
GBP93.9m), representing 102% of adjusted operating profit (HY 2021:
105%), 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 revolving credit facility by GBP100m in
May 2022 as well as the post period end acquisition of WhoWhatWear
for $120m. These scenarios confirm that even in the most severe but
plausible downside scenarios, the Group is able to generate profits
and positive cash flows. As a result, the Directors have a
reasonable expectation that the Group has adequate resources to
meet its obligations as they fall due for a period of at least 12
months from the date of these results.
The Directors also note that at the period end the Group had net
current liabilities of GBP138.2m (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
(GBP70m), deferred income of GBP74.1m (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% or higher 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 HY 2022 results.
Principal risks and uncertainties
The principal risks and uncertainties for the six months remain
unchanged from those detailed in the Group's Annual Report and
Accounts for the year ended 30 September 2021 and we do not see any
material risk arising from the Russia and Ukraine conflict.
Reference should be made to pages 60 to 64 of the 2021 Annual
Report and Accounts for more detail on the potential impact of
risks and examples of mitigation.
The principal risks relevant to the Group's activities at the
half year are:
-- Personal data The collection, storage and use of personal
data presents a risk of misuse, loss, compromise or unauthorised
access, which could result in reputational damage, regulatory
intervention, financial penalties in the event of a serious breach
along with a loss of trust amongst customers and partners.
-- Media market disruption and changing consumer habits Failure
to anticipate and respond to market disruption and changing content
consumer habits may affect demand for our products and services and
our ability to drive long-term growth.
-- Key person risk Lack of skilled, experienced and motivated
people at executive board level and throughout the wider group may
lead to an inability to deliver on strategy and business and
financial performance targets.
-- Cyber security and IT A failure to manage and mitigate
cyber-related incidents affecting datastores, tech infrastructure
and websites may lead to unavailability of services, access to or
compromise of data, which could have reputational, financial and
regulatory consequences.
-- Reliance on third party distribution platforms Changes in
algorithms and strategies of tech giants could materially impact
traffic and media revenues. For instance, search engines can make
changes to their ranking algorithms, methodologies and design
layouts that could reduce the prominence of links to websites
offering our content and negatively impact traffic.
-- Digital advertising market changes Failure to anticipate
changing customer behaviour, developments in technology, privacy
standards, changes on targeted personalised ads and the approach to
customer acquisition by third parties advertisers may have a
negative impact on market share, revenue and profit.
-- Economic & Geo-political uncertainty An economic
downturn, fiscal policy changes or unexpected developments linked
to worsening economic conditions may have a negative impact on
revenue and profit.
-- Reliance on key third party service providers A failure of
one of our critical third parties may cause disruption to business
operations, impact our ability to deliver products and services,
meet the needs of our customers and result in financial loss. The
reputation of our businesses may be damaged by poor performance or
a regulatory breach by critical third parties.
-- Pandemic impact continues Further lockdowns or restrictions
imposed by governments as a consequence of increasing COVID-19
infection rates, may have a negative effect on revenue and profit
and on the wellbeing of colleagues across the Group.
Condensed consolidated interim financial statements
Consolidated income statement
for the six months ended 31 March 2022 (unaudited)
6 months to 31 March 6 months to 31 March
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 1,2 404.3 - 404.3 272.6 - 272.6
Net operating
expenses 3 (269.8) (46.1) (315.9) (183.4) (29.5) (212.9)
-------------------- ----- ---------- ------------ ---------- ---------- ------------ ----------
Operating profit 1 134.5 (46.1) 88.4 89.2 (29.5) 59.7
-------------------- ----- ---------- ------------ ---------- ---------- ------------ ----------
Finance costs 6 (7.4) - (7.4) (2.8) - (2.8)
-------------------- ----- ---------- ------------ ---------- ---------- ------------ ----------
Profit before
tax 1 127.1 (46.1) 81.0 86.4 (29.5) 56.9
Tax (charge)/credit 7 (27.5) 9.8 (17.7) (18.1) 3.7 (14.4)
-------------------- ----- ---------- ------------ ---------- ---------- ------------ ----------
Profit for the
period
attributable
to
owners of the
parent 99.6 (36.3) 63.3 68.3 (25.8) 42.5
-------------------- ----- ---------- ------------ ---------- ---------- ------------ ----------
Earnings per 15p Ordinary share
6 months to 31 March 6 months to 31 March
2022 2021
Note Adjusted Adjusting Statutory Adjusted Adjusting Statutory
results items results results items results
pence pence pence pence pence pence
----------------- ----- --------- ---------- ---------- --------- ---------- ----------
Basic earnings
per share 9 82.7 (30.2) 52.5 66.4 (25.1) 41.3
Diluted earnings
per share 9 81.3 (29.6) 51.7 65.4 (24.7) 40.7
----------------- ----- --------- ---------- ---------- --------- ---------- ----------
Consolidated statement of comprehensive income
for the six months ended 31 March 2022 (unaudited)
6 months to 6 months
31 March to
2022 31 March
GBPm 2021
GBPm
------------------------------------------ ------------ ----------
Profit for the period 63.3 42.5
------------------------------------------ ------------ ----------
Items that may be reclassified to the
consolidated income statement
------------------------------------------ ------------ ----------
Currency translation differences 8.9 (16.1)
------------------------------------------ ------------ ----------
Other comprehensive income / (expense)
for the period 8.9 (16.1)
------------------------------------------ ------------ ----------
Total comprehensive income for the period
attributable to
owners of the parent 72.2 26.4
------------------------------------------ ------------ ----------
Consolidated statement of changes in equity
for the six months ended 31 March 2022 (unaudited)
Issued Share Accumulated
share premium Merger Treasury exchange Retained Total
capital account reserve reserve differences earnings equity
Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------------- ------- --------- --------- ---------- ----------- ------------- ---------- ---------
Balance at 1 October
2021 18.1 197.0 581.9 (7.6) (10.1) 83.0 862.3
----------------------- ------- --------- --------- ---------- ----------- ------------- ---------- ---------
Profit for the
period - - - - - 63.3 63.3
----------------------- ------- --------- --------- ---------- ----------- ------------- ---------- ---------
Currency translation
differences - - - - 8.9 - 8.9
----------------------- ------- --------- --------- ---------- ----------- ------------- ---------- ---------
Other comprehensive
expense for the
period - - - - 8.9 - 8.9
----------------------- ------- --------- --------- ---------- ----------- ------------- ---------- ---------
Total comprehensive
income for the
period - - - - 8.9 63.3 72.2
Share schemes
- Issue of treasury
shares
to employees 14 - - - 6.4 - (6.4) -
- Value of employees'
services 5 - - - - - 6.3 6.3
- Current tax on
options - - - - - 1.0 1.0
- Deferred tax on
options - - - - - (7.2) (7.2)
Dividends paid to
shareholders - - - - - (3.4) (3.4)
----------------------- ------- --------- --------- ---------- ----------- ------------- ---------- ---------
Balance at 31 March
2022 18.1 197.0 581.9 (1.2) (1.2) 136.6 931.2
----------------------- ------- --------- --------- ---------- ----------- ------------- ---------- ---------
Balance at 1 October
2020 14.7 197.0 170.9 (8.8) 2.2 5.3 381.3
----------------------- ------- --------- --------- ---------- ----------- ------------- ---------- ---------
Profit for the period - - - - - 42.5 42.5
----------------------- ------- --------- --------- ---------- ----------- ------------- ---------- ---------
Currency translation
differences (net
of tax) - - - - (16.1) - (16.1)
----------------------- ------- --------- --------- ---------- ----------- ------------- ---------- ---------
Other comprehensive
expense for the
period - - - - (16.1) - (16.1)
----------------------- ------- --------- --------- ---------- ----------- ------------- ---------- ---------
Total comprehensive
income for the period - - - - (16.1) 42.5 26.4
Share capital issued 13,
during the period 14 3.4 - 411.0 - - - 414.4
Acquisition of own
shares - - - (4.9) - - (4.9)
Share schemes
- Issue of treasury
shares
to employees - - - 1.2 - (1.2) -
- Value of employees'
services 5 - - - - - 2.8 2.8
- Deferred tax on
options - - - - - 0.8 0.8
Dividends paid to
shareholders - - - - - (1.6) (1.6)
----------------------- ------- --------- --------- ---------- ----------- ------------- ---------- ---------
Balance at 31 March
2021 18.1 197.0 581.9 (12.5) (13.9) 48.6 819.2
----------------------- ------- --------- --------- ---------- ----------- ------------- ---------- ---------
Consolidated balance sheet
as at 31 March 2022 (unaudited)
31 March 31 March 30 September
2022 2021 2021
Note GBPm GBPm GBPm
----------------------------------------- ----- --------- --------- -------------
Assets
Non-current assets
Property, plant and equipment 52.6 22.6 47.4
Intangible assets - goodwill 10 940.5 679.3 688.2
Intangible assets - other 10 597.1 494.2 466.5
Deferred tax - - 3.8
----------------------------------------- ----- --------- --------- -------------
Total non-current assets 1,590.2 1,196.1 1,205.9
----------------------------------------- ----- --------- --------- -------------
Current assets
Inventories 1.2 0.9 1.0
Corporation tax recoverable 0.1 - -
Trade and other receivables 127.4 105.6 98.0
Cash and cash equivalents 25.0 22.9 324.3
Finance lease receivable 4.2 1.2 1.9
----------------------------------------- ----- --------- --------- -------------
Total current assets 157.9 130.6 425.2
----------------------------------------- ----- --------- --------- -------------
Total assets 1,748.1 1,326.7 1,631.1
----------------------------------------- ----- --------- --------- -------------
Equity and liabilities
Equity
Issued share capital 13 18.1 18.1 18.1
Share premium account 197.0 197.0 197.0
Merger reserve 581.9 581.9 581.9
Treasury reserve (1.2) (12.5) (7.6)
Accumulated exchange differences (1.2) (13.9) (10.1)
----------------------------------------- ----- --------- -------------
Retained earnings 136.6 48.6 83.0
----------------------------------------- ----- --------- --------- -------------
Total equity 931.2 819.2 862.3
----------------------------------------- ----- --------- --------- -------------
Non-current liabilities
Financial liabilities - interest-bearing
loans and borrowings 344.2 182.8 458.1
Lease liability due in more than one
year 52.2 17.6 44.0
Deferred tax 100.4 65.8 70.3
Provisions 12 12.8 5.5 6.1
Deferred income 11.2 - -
----------------------------------------- ----- --------- --------- -------------
Total non-current liabilities 520.8 271.7 578.5
----------------------------------------- ----- --------- --------- -------------
Current liabilities
Financial liabilities - interest-bearing
loans and borrowings 69.5 81.4 42.5
Trade and other payables 11 203.3 145.8 140.8
Corporation tax payable 6.9 1.9 2.1
Lease liability due within one year 11.9 5.9 4.9
----------------------------------------- ----- --------- --------- -------------
Deferred consideration 4.5 0.8 -
----------------------------------------- ----- --------- --------- -------------
Total current liabilities 296.1 235.8 190.3
----------------------------------------- ----- --------- --------- -------------
Total liabilities 816.9 507.5 768.8
----------------------------------------- ----- --------- --------- -------------
Total equity and liabilities 1,748.1 1,326.7 1,631.1
----------------------------------------- ----- --------- --------- -------------
Consolidated cash flow statement
for the six months ended 31 March 2022 (unaudited)
6 months 6 months
to to
31 March 31 March
2022 2021
GBPm GBPm
------------------------------------------------------ ---------- ----------
Cash flows from operating activities
Cash generated from operations 138.1 85.9
Interest paid (5.1) (1.7)
Interest paid on lease liabilities (0.4) (0.5)
Tax paid (14.4) (6.2)
------------------------------------------------------ ---------- ----------
Net cash generated from operating activities 118.2 77.5
------------------------------------------------------ ---------- ----------
Cash flows from investing activities
Purchase of property, plant and equipment (1.7) (1.0)
Purchase of computer software and website development (4.5) (3.1)
Purchase of subsidiary undertakings, net of cash
acquired (14.6) (156.1)
Net cash used in investing activities (20.8) (160.2)
------------------------------------------------------ ---------- ----------
Cash flows from financing activities
Costs of share issue - (0.7)
Acquisition of own shares - (4.9)
Drawdown of bank loans - 241.1
Repayment of bank loans (385.7) (139.2)
Repayment of overdraft (3.1) -
Bank arrangement fees (0.1) (2.7)
Repayment of principal element of lease liabilities (3.1) (3.3)
Dividends paid (3.4) (1.6)
------------------------------------------------------ ---------- ----------
Net cash (paid)/generated from financing activities (395.4) 88.7
------------------------------------------------------ ---------- ----------
Net (decrease)/increase in cash and cash equivalents (298.0) 6.0
Cash and cash equivalents at beginning of period 324.3 19.3
Exchange adjustments (1.3) (2.4)
------------------------------------------------------ ---------- ----------
Cash and cash equivalents at end of period 25.0 22.9
------------------------------------------------------ ---------- ----------
Notes to the consolidated cash flow statement
for the six months ended 31 March 2022 (unaudited)
A. Cash generated from operations
The reconciliation of profit for the period to cash generated
from operations is set out below:
6 months 6 months
to 31 March to 31 March
2022 2021
GBPm GBPm
------------------------------------------ ------------- -------------
Profit for the period 63.3 42.5
------------------------------------------ ------------- -------------
Adjustments for:
Depreciation 4.6 4.3
Impairment charge 6.3 0.5
Amortisation of intangible assets 36.3 18.8
Share schemes
- Value of employees' services 6.3 2.8
Finance costs 7.4 2.8
Tax charge 17.7 14.4
Cash generated before changes in working
capital and
provisions 141.9 86.1
------------------------------------------ ------------- -------------
Movement in provisions 1.3 (1.0)
Increase in inventories (0.1) (0.2)
Increase in trade and other receivables (6.2) (1.1)
Increase in trade and other payables 1.2 2.1
------------------------------------------ ------------- -------------
Cash generated from operations 138.1 85.9
------------------------------------------ ------------- -------------
B. Analysis of net debt
Other 31
30 September Cash On non-cash Exchange March
2021 flows acquisition changes movements 2022
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------- -------- ------------- ---------- ----------- --------
Cash and cash equivalents 324.3 (302.4) 4.4 - (1.3) 25.0
Debt due within
one year (42.5) (24.3) (2.4) (0.3) - (69.5)
Debt due after more
than one year (458.1) 413.2 (296.2) (1.0) (2.1) (344.2)
---------------------------- -------- -------- ------------- ---------- ----------- --------
Net debt (176.3) 86.5 (294.2) (1.3) (3.4) (388.7)
---------------------------- -------- -------- ------------- ---------- ----------- --------
C. Reconciliation of movement in net debt
6 months 6 months
to to
31 March 31 March
2022 2021
GBPm GBPm
-------------------------------------------------- ---------- ----------
Net debt at start of period (176.3) (62.1)
(Decrease)/increase in cash and cash equivalents (298.0) 6.0
Movement in borrowings 90.3 (182.4)
Other non-cash changes (1.3) (0.6)
Exchange movements (3.4) (2.2)
-------------------------------------------------- ---------- ----------
Net debt at end of period (388.7) (241.3)
-------------------------------------------------- ---------- ----------
Basis of preparation
The condensed consolidated interim financial statements for the
six-month period ended 31 March 2022 are unaudited but have been
subject to an independent review by the auditor. They do not
constitute statutory financial statements as defined in section 434
of the Companies Act 2006. The comparative figures are for the six
month period ended 31 March 2021.
This unaudited condensed consolidated interim financial
information for the six months ended 31 March 2022 has been
prepared in accordance with International Accounting Standard 34
Interim Financial Reporting in conformity with the requirements of
the Companies Act 2006, and in accordance with the Disclosure
Guidance and Transparency Rules of the Financial Conduct
Authority.
The interim financial information contained in the Interim
Report should be read in conjunction with the Annual Report for the
year ended 30 September 2021.
Having considered the Group's funding position and latest
forecasts, the Directors believe that there is a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. Accordingly, the
Directors continue to adopt the going concern basis in preparing
the condensed interim financial information.
As stated in the financial statements for the year ended 30
September 2021 the following amendments to existing standards have
been applied where applicable: amendment to IFRS 3 Clarifying the
definition of a business, amendment to IAS 1 and IAS 8 Definition
of material, and amendments IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS
16: Interest Rate Benchmark Reform Phase 2. The accounting policies
adopted, methods of computation and presentation are otherwise
consistent with those set out in the Group's statutory accounts for
the financial year ended 30 September 2021.
There has been no material impact from the adoption of new
standards, amendments to standards or interpretations which are
relevant to the Group.
The Group's critical accounting judgments and other key sources
of estimation uncertainty remain the same as those as set out in
the Group's Consolidated Financial Statements for the year ended 31
September 2021.
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 underlying trading of the Group so as to
assist the user of the financial statements to better understand
the results of the Group. Details of exceptional items are shown in
note 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 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.
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 9.
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.
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 for payment of employer's taxes on share-based
payments relating to equity settled share
awards with vesting periods longer than 12
months, and to include lease repayments following
the adoption of IFRS 16 Leases.
Adjusted Free cash 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:
6 months 6 months
to to
31 March 31 March
2022 2021
GBPm GBPm
--------------------------------------- ---------- ----------
Adjusted operating profit 134.5 89.2
Adjusted finance costs (7.4) (2.8)
Adjusted profit before tax 127.1 86.4
Adjusting items:
Share-based payments (including social
security costs) (3.7) (2.7)
Exceptional items (note 4) (12.2) (11.5)
Amortisation of acquired intangibles (30.2) (15.3)
Profit before tax 81.0 56.9
--------------------------------------- ---------- ----------
A reconciliation of cash generated from operations to adjusted
free cash flow is shown below:
6 months 6 months
to to
31 March 31 March
2022 2021
GBPm GBPm
------------------------------------------------------- ---------- ----------
Cash generated from operations 138.1 85.9
Cash flows related to exceptional items 7.2 15.3
Settlement of employer's NI on share based payments(1) 1.8 0.1
Lease payments (3.1) (3.3)
------------------------------------------------------- ---------- ----------
Adjusted operating cash inflow 144.0 98.0
Cash flows related to capital expenditure (6.2) (4.1)
------------------------------------------------------- ---------- ----------
Adjusted free cash flow 137.8 93.9
------------------------------------------------------- ---------- ----------
(1) Relating to equity-settled share awards with vesting periods
longer than 12 months.
A reconciliation between adjusted and statutory earnings per
share measures is shown in note 9.
Notes to the financial information
1. Segmental reporting
The Group is organised and arranged primarily by reportable
segment. The Executive Directors consider the performance of the
business from a geographical perspective, namely the UK and the US.
The Australian business is considered to be part of the UK segment
and is not reported separately due to its size. The Group also uses
a sub-segment split of Media (websites and events) and Magazines
for further analysis. The Group considers that the assets within
each geographical segment are exposed to the same risks.
(a) Reportable segment
(i) Segment revenue
6 months 6 months
to to
31 March 31 March
2022 2021
Sub-segment GBPm Sub-segment GBPm
--------- -------------------------- ---------- ------------------------------ ----------
Media Magazines Total Media Magazines Total
GBPm GBPm GBPm GBPm GBPm GBPm
--------- --------- --------------- ---------- ----------- ----------------- ----------
Segment:
UK 138.6 111.3 249.9 75.3 86.2 161.5
US 120.0 34.4 154.4 107.3 3.8 111.1
--------- --------- --------------- ---------- ----------- ----------------- ----------
Total 258.6 145.7 404.3 182.6 90.0 272.6
--------- --------- --------------- ---------- ----------- ----------------- ----------
Transactions between segments are carried out at arm's
length.
(ii) Segment adjusted operating profit
6 months 6 months
to to
31 March 31 March
2022 2021
GBPm GBPm
------ ---------------- ------------- ----------- ---------------- ------------- -----------
Adjusted Adjusted
operating operating
profit prior Adjusted profit prior Adjusted
to intra-group Intra-group operating to intra-group Intra-group operating
adjustments adjustments profit adjustments adjustments profit
GBPm GBPm GBPm GBPm GBPm GBPm
------ ---------------- ------------- ----------- ---------------- ------------- -----------
UK 52.2 40.0 92.2 19.3 34.2 53.5
US 82.3 (40.0) 42.3 69.9 (34.2) 35.7
------ ---------------- ------------- ----------- ---------------- ------------- -----------
Total 134.5 - 134.5 89.2 - 89.2
------ ---------------- ------------- ----------- ---------------- ------------- -----------
A reconciliation of total segment adjusted operating profit to
profit before tax is provided as follows:
6 months 6 months
to to
31 March 31 March
2022 2021
GBPm GBPm
------------------------------------------------ ---------- ----------
Total segment adjusted operating profit 134.5 89.2
Share-based payments (including social security
costs) (3.7) (2.7)
Amortisation of acquired intangibles (30.2) (15.3)
Exceptional items (note 4) (12.2) (11.5)
Finance costs (7.4) (2.8)
Profit before tax 81.0 56.9
------------------------------------------------ ---------- ----------
2. Revenue
The table below disaggregates revenue according to the timing of
satisfaction of performance obligations:
6 months 6 months
to to
31 March 31 March
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 7.6 396.7 404.3 6.6 266.0 272.6
-------------- ----- -------- ---------- ----- -------- ----------
See note 1 for disaggregation of revenue by geography.
3. Net operating expenses
Operating profit is stated after charging:
6 months to 31 March 6 months to 31 March
2022 2021
Adjusted Adjusting Statutory Adjusted Adjusting Statutory
results items results results items results
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------- --------- ---------- ---------- --------- ---------- ----------
Cost of sales (187.2) - (187.2) (119.5) - (119.5)
Distribution expenses (20.7) - (20.7) (10.8) - (10.8)
Share-based payments
(including social security
costs) - (3.7) (3.7) - (2.7) (2.7)
Exceptional items (note
4) - (12.2) (12.2) - (11.5) (11.5)
Depreciation (4.6) - (4.6) (4.3) - (4.3)
Amortisation (6.1) (30.2) (36.3) (3.5) (15.3) (18.8)
Other administration
expenses (51.2) - (51.2) (45.3) - (45.3)
---------------------------- --------- ---------- ---------- --------- ---------- ----------
Total (269.8) (46.1) (315.9) (183.4) (29.5) (212.9)
---------------------------- --------- ---------- ---------- --------- ---------- ----------
4. Exceptional items
6 months 6 months
to to
31 March 31 March
2022 2021
GBPm GBPm
------------------------------------------ ---------- ----------
Acquisition and integration related costs 2.2 12.5
Onerous property costs 10.0 (1.0)
Total charge 12.2 11.5
------------------------------------------ ---------- ----------
Acquisition and integration related costs include GBP2.2m
relating to the Dennis acquisition (2021: GBP10.2m deal fees and
GBP2.3m integration and restructuring costs primarily in respect of
the GoCo acquisition). A total of GBP10.0m has been recognised in
respect of onerous properties, partly reflecting extended time
frames in subletting existing onerous property leases as well as
GBP5.4m relating to properties acquired as part of the Dennis
acquisition.
Further details in respect of the acquisitions are shown in note
16.
5. Employee costs
6 months 6 months
to to
31 March 31 March
2022 2021
GBPm GBPm
------------------------------------------ ---------- ----------
Wages and salaries 84.7 68.9
Social security costs 4.9 6.3
Other pension costs 2.6 1.8
Share schemes
* Value of employees' services 6.3 2.8
Total employee costs 98.5 79.8
------------------------------------------ ---------- ----------
The table above includes the all-employee profit pool bonus.
IFRS 2 Share-based Payment requires an expense for equity
instruments granted to be recognised over the appropriate vesting
period, measured at their fair value at the date of grant.
The fair value has been calculated using the Monte Carlo and
Black-Scholes models, using the most appropriate model for each
scheme. Assumptions have been made in these models for expected
volatility, risk-free rates and dividend yields.
Key management personnel compensation
6 months 6 months
to to
31 March 31 March
2022 2021
GBPm GBPm
------------------------------------------------ ---------- ----------
Salaries and other short-term employee benefits 1.7 1.3
Share schemes
* Value of employees' services 1.3 1.9
Total employee costs 3.0 3.2
------------------------------------------------ ---------- ----------
Key management personnel are deemed to be the members of the
Board of Future plc.
6. Finance costs
6 months 6 months
to to
31 March 31 March
2022 2021
GBPm GBPm
----------------------------------------------- ---------- ----------
Interest payable on interest-bearing loans and
borrowings (5.2) (1.7)
Amortisation of bank loan arrangement fees (1.2) (0.6)
Interest payable on lease liabilities (1.0) (0.5)
Finance costs (7.4) (2.8)
----------------------------------------------- ---------- ----------
There is no finance income in the period (2021: Nil).
7. Tax on profit
The tax charge for the six months ended 31 March 2022 is based
on the effective tax rate, estimated on a full year basis, being
applied to the statutory profit for the six months ended 31 March
2022. The Group's adjusted effective tax rate is 21.6% (HY 2021:
20.9%).
The Group's statutory effective tax rate is 21.9% (HY 2021:
25.3%) with the difference between the statutory rate and adjusted
effective rate being the impact of exceptional costs, and the tax
rate differential of UK and US acquired intangible asset
amortisation that is excluded from adjusted profit before tax.
8. Dividends
6 months 6 months
to to
31 March 31 March
Equity dividends 2022 2021
-------------------------------------------- ---------- ----------
Number of shares in issue at end of period
(million) 120.8 120.6
Dividends paid and payable in period (pence
per share) 2.8 1.6
Dividends paid in period (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. The dividend in respect of the year ended 30
September 2021 was paid on 9 February 2022. The Board has not
proposed a dividend for the six months ended 31 March 2022.
9. Earnings per share
Basic earnings per share are calculated using the weighted
average number of Ordinary shares in issue during the year. Diluted
earnings per share have been calculated by taking into account the
dilutive effect of shares that would be issued on conversion into
Ordinary shares of awards held under employee share schemes.
Adjusted earnings per share remove the effect of share based
payments, exceptional items (note 4), amortisation of intangible
assets arising on business combinations, and any related tax
effects from the calculation.
6 months 6 months
to to
31 March 31 March
2022 2021
-------------------------------------------------- ----------- -----------
Adjustments to profit after tax:
Profit after tax (GBPm) 63.3 42.5
Share-based payments (including social security
costs) (GBPm) 3.7 2.7
Exceptional items (GBPm) 12.2 11.5
Amortisation of intangible assets arising on
acquisitions (GBPm) 30.2 15.3
Tax effect of the above adjustments (GBPm) (9.8) (3.7)
Adjusted profit after tax (GBPm) 99.6 68.3
-------------------------------------------------- ----------- -----------
Weighted average number of shares in issue during
the period:
- Basic 120,504,929 102,791,476
- Dilutive effect of share options 1,939,825 1,591,646
- Diluted 122,444,754 104,383,122
Basic earnings per share (in pence) 52.5 41.3
Adjusted basic earnings per share (in pence) 82.7 66.4
Diluted earnings per share (in pence) 51.7 40.7
Adjusted diluted earnings per share (in pence) 81.3 65.4
-------------------------------------------------- ----------- -----------
The adjustments to profit after tax have the
following effect:
Basic earnings per share (pence) 52.5 41.3
Share-based payments (including social security
costs) (pence) 3.1 2.6
Exceptional items (pence) 10.1 11.2
Amortisation of intangible assets arising on
acquisitions (pence) 25.1 14.9
Tax effect of the above adjustments (pence) (8.1) (3.6)
Adjusted basic earnings per share (pence) 82.7 66.4
-------------------------------------------------- ----------- -----------
Diluted earnings per share (pence) 51.7 40.7
Share-based payments (including social security
costs) (pence) 3.0 2.6
Exceptional items (pence) 10.0 11.0
Amortisation of intangible assets arising on
acquisitions (pence) 24.7 14.7
Tax effect of the above adjustments (pence) (8.1) (3.6)
Adjusted diluted earnings per share (pence) 81.3 65.4
-------------------------------------------------- ----------- -----------
10. 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 244.2 - 89.5 - 61.9 5.9 1.8 403.3
Other additions - - - - - - 4.5 4.5
Exchange adjustments 9.4 0.1 2.5 0.4 1.1 0.5 - 14.0
---------------------- --------- ----------- ------- --------------- ------------ ------------- ------ -------
At 31 March
2022 1,204.8 90.5 441.7 54.9 78.2 49.0 52.3 1,971.4
---------------------- --------- ----------- ------- --------------- ------------ ------------- ------ -------
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
period - (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
period - (3.9) (14.0) (4.5) (5.1) (2.7) (6.1) (36.3)
Exchange adjustments (1.3) - (0.5) (0.1) (0.1) (0.4) (0.2) (2.6)
---------------------- --------- ----------- ------- --------------- ------------ ------------- ------ -------
At 31 March
2022 (264.3) (25.9) (45.9) (18.2) (10.9) (30.2) (38.4) (433.8)
---------------------- --------- ----------- ------- --------------- ------------ ------------- ------ -------
Net book value
at 31 March 2022 940.5 64.6 395.8 36.7 67.3 18.8 13.9 1,537.6
---------------------- --------- ----------- ------- --------------- ------------ ------------- ------ -------
Net book value
at 30 September
2021 688.2 68.4 318.3 40.9 9.5 15.5 13.9 1,154.7
---------------------- --------- ----------- ------- --------------- ------------ ------------- ------ -------
Useful economic 5-15 3-20 8-10 7-11 3-15 2
lives years years years years years years
---------------------- --------- ----------- ------- --------------- ------------ ------------- ------ -------
The other acquired intangibles category in the table above
includes assets relating to customer lists, content and
websites.
Any residual amount arising as a result of the purchase
consideration being in excess of the value of acquired assets is
recorded as goodwill.
Further details regarding the intangible assets acquired during
the period through business combinations are set out in note
16.
Other intangibles relate to capitalised software costs and
website development costs. Amortisation is included within
administration expenses in the consolidated income statement.
11. Trade and other payables
31 March 30 September
2022 2021
GBPm GBPm
----------------------------------- --------- -------------
Trade payables 29.7 25.8
Other taxation and social security 7.8 8.2
Other payables 10.3 11.1
Accruals 92.6 88.6
Deferred income 62.9 7.1
----------------------------------- --------- -------------
Total 203.3 140.8
----------------------------------- --------- -------------
The increase in deferred income primarily relates to the Dennis
acquisition.
12. Provisions
31 March 30 September
2022 2021
GBPm GBPm
--------- --------- -------------
Property 8.5 5.6
Other 4.3 0.5
Total 12.8 6.1
--------- --------- -------------
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.
13. Issued share capital
During the period 165,891 Ordinary shares with a nominal value
of GBP24,884 were issued by the Company pursuant to share scheme
exercises throughout the period (31 March 2021: no shares were
issued). 700 Ordinary shares were issued under the Share Incentive
Plan for a combined total cash commitment of GBPnil.
As at 31 March 2022 there were 120,791,225 Ordinary shares in
issue (31 March 2021: 120,624,133; 30 September 2021:
120,624,634).
14. Reserves
Treasury reserve
The treasury reserve represents the cost of shares in Future plc
purchased in the market and held by the Employee Benefit Trust
('EBT') to satisfy awards made by the trustees.
During the period 365,505 of the shares held by the EBT were
used to satisfy the vesting of share options and 22,216 shares were
purchased to fund the future vesting of share options (31 March
2021 276,132 were purchased, at a total value of GBP4.9m).
Merger reserve
During the period there was no movement on the merger reserve.
In the comparative period 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.
15. Contingent liabilities
There were no material contingent liabilities as at 31 March
2022.
16. 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 GBP1m however the acquired debt of
GBP298.6m was required to be repaid immediately following the
acquisition.
The impact of the acquisition on the consolidated balance sheet
was:
Provisional
Fair value
GBPm
------------------------------------------------- ------------
Tangible assets
- Right-of-use lease assets 11.2
- Other tangible assets 2.0
Intangible assets
- Brand 89.5
- Advertiser relationships 5.9
- Subscriber relationships 61.9
- Software 1.5
Cash and cash equivalents 0.8
Inventory 0.1
Trade and other receivables 20.9
Finance lease receivable due within 1 year 0.5
Corporation tax receivable 0.4
Trade and other receivables due in more than 0.6
1 year 2.2
Finance lease receivables due in more than (60.7)
1 year (1.9)
Trade and other payables (2.4)
Lease liability due within one year
Financial liabilities - interest bearing loans
and borrowings due in less than one year (7.1)
Non-current liabilities (10.8)
- Provisions (14.1)
-Deferred income (296.2)
- Lease liability due in more than one year
- Financial liabilities - interest bearing (29.0)
loans and borrowings due in more than one
year
Deferred tax
------------------------------------------------- ------------
Net assets acquired (224.7)
------------------------------------------------- ------------
Goodwill 225.7
------------------------------------------------- ------------
1.0
------------------------------------------------- ------------
Consideration:
Cash 1.0
------------------------------------------------- ------------
Total Consideration 1.0
------------------------------------------------- ------------
The acquisition will scale the Group's 'Wealth & Savings'
vertical, further diversify 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, deepen
the Group's existing presence in the 'B2B Pro Technology' vertical
and enhance 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.
Included within the Group's results for the period are revenues
of GBP63.0m 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.
Acquisition of WhatCulture
On 23 March 2022, the Group acquired WhatCulture, an
entertainment based website, for total consideration of GBP22.3m.
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 provisional impact of the acquisition on the consolidated
balance sheet was:
Provisional
Fair value
GBPm
============================== -------------------------------------
Tangible assets
- Land and buildings 0.4
Cash 3.6
Trade and other receivables 0.3
Corporation tax payable (0.4)
Trade and other payables (0.1)
============================== -------------------------------------
Net assets acquired 3.8
------------------------------ -------------------------------------
Goodwill 18.5
------------------------------ -------------------------------------
22.3
------------------------------ -------------------------------------
Consideration:
Cash 17.8
Deferred consideration 4.5
------------------------------ -------------------------------------
Total Consideration 22.3
------------------------------ -------------------------------------
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.
The fair values included for the WhatCulture acquisition are
described as 'provisional' as the acquisition occurred within one
month of the balance sheet date and so further time is required in
order to fully ascertain the fair value of assets and liabilities
acquired.
17. Post balance sheet events
On 10th May 2022 the Group announced the acquisition of
WhoWhatWear, a leading digital-only women's lifestyle publisher
based in the US from Clique Brands Inc for consideration of
$120m.
WhoWhatWear 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
publisher has 12m online users (source: GoogleAnalytics) and 10m
social followers, with around 90% of its unaudited 2021 revenue
($38m) being generated from the US.
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 will become the 6th
largest Beauty and Fashion publisher in the US (source:
ComScore).
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 WhoWhatWear's leading direct advertising
sales capabilities, whilst WhoWhatWear will benefit from Future's
proprietary technology stack and operating model to drive the
platform effect.
The acquisition will be funded from the Group's existing debt
facilities and is expected to complete in June 2022 following US
regulatory approval. Following the acquisition, leverage is
expected to remain at under 2x Adjusted EBITDA.
On 17th 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.
Statement of Directors' responsibilities
We confirm that to the best of our knowledge:
-- the condensed set of financial statements has been prepared
in accordance with IAS 34 Interim Financial Reporting in conformity
with the requirements of the Companies Act 2006;
-- the interim management report includes a fair review of the
information required by:
a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules,
being an indication of important events that have occurred during
the first six months of the financial year and their impact on the
condensed set of financial statements; and a description of the
principal risks and uncertainties for the remaining six months of
the year; and
b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules,
being related party transactions that have taken place in the first
six months of the current financial year and that have materially
affected the financial position or performance of the entity during
that period; and any changes in the related party transactions
described in the last annual report that could do so.
A list of current Directors is maintained on the Future plc
website, www.futureplc.com
By order of the Board
Directors
Richard Huntingford
Independent Non-Executive Chairman
Zillah Byng-Thorne
Chief Executive Officer
Penny Ladkin-Brand
Chief Financial Officer
Hugo Drayton
Senior Independent Non-Executive
Alan Newman
Independent Non-Executive
Rob Hattrell
Independent Non-Executive
Meredith Amdur
Independent Non-Executive
Mark Brooker
Independent Non-Executive
Angela Seymour-Jackson
Independent Non-Executive
17 May 2022
The maintenance and integrity of the Future plc website is the
responsibility of the Directors; the work carried out by the
auditors does not involve consideration of these matters and,
accordingly, the auditors accept no responsibility for any changes
that may have occurred to the financial statements since they were
initially presented on the website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
Independent review report to Future plc
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 31 March 2022 which comprises the consolidated
income statement, consolidated balance sheet, the consolidated
statement of changes in equity, the consolidated cash flow
statement and related notes 1 to 17. We have read the other
information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the
Group will be prepared in accordance with United Kingdom adopted
international accounting standards. The condensed set of financial
statements included in this half-yearly financial report has been
prepared in accordance with United Kingdom adopted International
Accounting Standard 34, "Interim Financial Reporting".
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Financial Reporting Council for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 31
March 2022 is not prepared, in all material respects, in accordance
with United Kingdom adopted International Accounting Standard 34
and the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Use of our report
This report is made solely to the company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Financial
Reporting Council. Our work has been undertaken so that we might
state to the company those matters we are required to state to it
in an independent review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company, for our review
work, for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
Reading, United Kingdom
17 May 2022
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END
IR ZZGMKKRDGZZG
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May 18, 2022 02:05 ET (06:05 GMT)
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