TIDMFUTR
RNS Number : 1132K
Future PLC
20 April 2020
20 April 2020
Future plc
Completion of TI Media acquisition; Update on Covid-19; Banking
facilities; and Board changes
Future plc (LSE: FUTR; "the Group"), the global platform for
specialist media, today announces the completion of the acquisition
of TI Media, which was announced on 30 October 2019 and was
conditional upon clearance from the Competition and Markets
Authority ("CMA"). TI Media is a UK-based, print-led consumer
magazine and digital publisher with deep industry heritage and a
portfolio that incorporates 38 brands including: Decanter; Country
Life; Homes&Gardens; and Woman & Home. TI Media brings to
Future a presence in the Wine, Golf, Equestrian, Country Living, TV
Listings, Women's Lifestyle and Gardening verticals, and deepens
and extends Future's strength and position in Home, Cycling and
Country Sports.
On 16 March 2020, it was announced that the CMA had found that
the purchase of TI Media did not raise competition concerns,
subject to the sale of three closely competing products: World
Soccer; Amateur Photographer; and the technology website
Trustedreviews.com. We are pleased to announce today that Future
has agreed the sales of World Soccer and Amateur Photographer to
Kelsey Media, and Trusted Reviews to Incisive Media. These sales
are expected to complete in the next few weeks. In addition,
earlier this year, TI Media sold Collective Europe Ltd, its digital
marketing agency, to Azerion Holding B.V., with Collective Europe
Ltd identified as a non-core business by Future at the time of the
deal.
In the year to December 2019, the combined revenue and EBITDA
contribution in relation to these four assets was GBP12m and
GBP0.3m respectively. The aggregate purchase price received for all
four assets was GBP1.4m.
The TI Media acquisition continues to offer a compelling
strategic and financial rationale, with entry into new market
verticals through its leading brands, and expansion within existing
markets. Leveraging Future's proprietary technology platform and
global operating model, we remain excited about the long term
opportunity.
Covid-19 update
Future
We continue to monitor closely the Covid-19 pandemic and its
impact on our staff, clients and operations. Our primary focus is
ensuring the safety and well-being of our employees and we were
able to successfully implement a global remote working policy at an
early stage of the pandemic. We continue to support our clients and
the communities impacted with an initiative launched to assist
staff in becoming NHS volunteers, as well as providing many content
insights to support communities in lockdown.
Our audience numbers remain strong, and are benefiting from
additional users currently searching for advice and inspiration;
March was the biggest month ever for Tom's Guide, with over 22
million users and 28 million sessions, while Live Science had 100
million sessions in the month.
Our digital revenue performance continues to be encouraging
with, to date, continued strength in eCommerce, and although
digital advertising is experiencing some reduction in yields this
is offset in the main by audience growth.
As previously announced, all material Events that were scheduled
during April to June have been moved to later in the financial
year, and are subject to ongoing review, while less material Events
have been cancelled for the remainder of our financial year.
High street store closures have impacted magazine sales. Whilst
we expect a significant reduction in sales in the coming months,
our digital copies and subscriptions are performing well.
Future has carried out a number of cost saving measures, in
order to protect profitability across the Group and lessen the
economic impact of Covid-19 over the coming months. This includes
the reduction in supply of magazines to retail outlets, the
acceleration of the closure of a number of marginal magazine
titles, a reduction in the variable costs associated with Events, a
25% reduction in discretionary costs, and some salary savings,
including the furlough of some staff in impacted areas. The senior
management team and Board have also taken a 20% reduction in salary
from March.
TI Media
TI Media is a less diversified business and therefore the impact
of Covid-19 is expected to be more significant. Magazine newsstand
revenues have been impacted during the period of lockdown, with UK
newsstand revenues reduced by approximately 30% since the
introduction of lockdown measures on 23 March. However,
subscriptions have been performing well, with demand driving a
material year-on-year increase in new sales. Events, most notably
the Decanter World Wine Awards, have also been deferred until later
in the financial year.
In order to mitigate the impact of the reduction in revenue, a
number of cost savings have been implemented within TI Media, which
include a reduction of promotional and discretionary costs, smaller
print runs to reduce the supply of magazines, the furlough of some
staff and role closures, and tiered salary reductions for all
staff.
Banking facilities
The Group is also pleased to announce the signing of a new
GBP30m multi-currency Revolving Credit Facility ("RCF"). The RCF,
which will stand alongside Future's existing debt facilities, and
matures in 12 months, has been arranged in order to provide the
Group with additional working capital headroom to maintain the
underlying growth momentum of the combined business, whilst
navigating the impact of Covid-19.
The key terms of the new RCF mirror the Group's existing debt
facilities, and are being provided by the Group's existing banking
syndicate of HSBC, Natwest and Bank of Ireland.
The Group's current net debt is GBP93m following completion of
the TI transaction, with available cash headroom of GBP69m under
the new facilities.
Board changes
As previously announced, the Group confirms that, with effect
from 1 June 2020 (following an initial period of TUPE consultation
with the TI Media employees), Rachel Addison will join the Board of
Future plc as Chief Financial Officer.
Rachel replaces Penny Ladkin-Brand, who will be stepping down
from the Board to assume the role of Chief Strategy Officer.
Outlook
Covid-19 introduces a significant level of uncertainty. However,
given the Group's diversified model, revenue mix benefit, variable
cost base, reduction in overheads, and the bank facility headroom
outlined above, as well as exchange rate benefits, the Group is
well placed to tackle the challenges that lie ahead.
The Group will publish its interim results for the six months to
31 March 2020 on 22 May 2020.
Enquiries:
Future plc cosec@futurenet.com
Zillah Byng-Thorne, Chief Executive Officer
Penny Ladkin-Brand, Chief Financial Officer
Instinctif Partners future@instinctif.com
Kay Larsen, Chantal Woolcock, Hannah Campbell
About Future
Future is a global platform business for specialist media with
diversified revenue streams.
The Media division is high-growth with three complementary
revenue streams: eCommerce, Events and digital advertising
including advertising within newsletters. It operates in a number
of sectors including technology, games, music, home interest,
hobbies and B2B and its brands include TechRadar, PC Gamer, Tom's
Guide, Android Central, Homebuilding & Renovating Show,
GamesRadar+, The Photography Show, Top Ten Reviews, Live Science,
Guitar World, MusicRadar, Space.com and Tom's Hardware.
The Magazine division focuses on publishing specialist content,
with 70 publications and 625 bookazines published per year,
totalling global circulation of 1.4 million. The Magazine portfolio
spans technology, games and entertainment, music, creative and
photography, hobbies, home interest and B2B. Its titles include
Classic Rock, Guitar Player, FourFourTwo, Homebuilding &
Renovating, Digital Camera, Guitarist, How It Works, Total Film,
What Hi-Fi? and Music Week.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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