16 May 2024
FUTURE plc
2024 HALF YEAR
RESULTS
Future plc (LSE: FUTR, "Future",
"the Group"), the global platform for specialist media, today
publishes its results for the half-year ended 31 March
2024.
Highlights
Financial results for the six
months ended 31 March 2024
|
Adjusted results¹
|
HY 2024
|
HY 2023
|
Reported
Var
|
Constant1
currency var
|
Organic1
Var
|
|
Revenue (£m)
|
391.5
|
404.7
|
(3)%
|
(1)%
|
(2)%
|
|
Adjusted EBITDA (£m)
|
113.9
|
141.9
|
(20)%
|
(17)%
|
n/a
|
|
Adjusted operating profit
(£m)
|
105.8
|
130.3
|
(19)%
|
(16)%
|
n/a
|
|
Adjusted operating profit margin
(%)
|
27%
|
32%
|
(5)ppt
|
(5)ppt
|
n/a
|
|
Adjusted diluted EPS
(p)
|
57.2
|
71.2
|
(20)%
|
n/a
|
n/a
|
|
Adjusted free cash flow
(£m)
|
126.0
|
130.0
|
(3)%
|
n/a
|
n/a
|
|
Statutory results
|
HY
2024
|
HY
2023
|
Reported
Var
|
|
|
|
Revenue (£m)
|
391.5
|
404.7
|
(3)%
|
|
|
|
Operating profit (£m)
|
63.7
|
83.9
|
(24)%
|
|
|
|
Operating profit margin
(%)
|
16%
|
21%
|
(5)ppt
|
|
|
|
Profit before tax (£m)
|
46.6
|
66.4
|
(30)%
|
|
|
|
Diluted EPS (p)
|
29.0
|
46.7
|
(38)%
|
|
|
|
Cash generated from operations
(£m)
|
130.4
|
117.3
|
+11%
|
|
|
1 The Glossary section of this document provides definitions
of, and reconciliations to, adjusted measures.
Financial highlights
● Revenue
of £391.5m (HY 2023: £404.7m), down (3)% year-on-year, impacted by
a modest (2)% organic decline combined with adverse foreign
exchange (mainly USD) and offset by the impact of acquisitions and
disposals.
○ The
Group returned to year-on-year revenue growth in Q2 with organic
revenue growth of +3%.
○ UK
revenue grew by +3% on an organic basis with very strong growth in
price comparison (Go.Compare), up +30%, and good growth in B2B. As
anticipated, other media performance (digital advertising,
affiliate products, events), was impacted by market conditions,
down (9)%.
○ US
revenue declined by (11)% on an organic basis, with an improving
trend through Q2. Digital advertising returned to organic
year-on-year growth in Q2, notably across direct to client sales,
whilst affiliate products continued to be impacted by weak consumer
sentiment.
●
Profitability was mainly impacted by an adverse revenue mix and
investment from the previously announced Growth Acceleration
Strategy, resulting in an adjusted operating profit decline of
(19)% to £105.8m (HY 2023 £130.3m). Statutory operating profit was
down (24)% to £63.7m (HY 2023: £83.9m).
● The
Group remains highly cash generative with adjusted free cash flow
of £126.0m (HY 2023: £130.0m), representing 119% of adjusted
operating profit (HY 2023: 100%). Cash generated from operations
was £130.4m (HY 2023: £117.3m).
●
Leverage1 was unchanged at 1.25x (FY 2023: 1.25x) with
net debt1 at the end of the half year of £296.7m (FY
2023: £327.2m). Total available debt facilities at the end of March
2024 were £650m (FY 2023: £900m).
● £35.9m
was returned to shareholders during the period with £32.0m through
the completed £45m share buyback programme launched in August 2023
(HY 2023: £nil) and dividends of £3.9m (HY 2023: £4.1m). The Group
plans a further return of up to £45m to shareholders through a
share buyback programme commencing shortly. Once the Share Buyback
Programme commences, the Board will keep it under review and
continue to assess it against its capital allocation
priorities.
Growth Acceleration Strategy (GAS)
● In
December 2023, we launched the Growth Acceleration Strategy ("GAS")
to ensure Future is well-positioned to capitalise on future
opportunities in its attractive and growing markets. This is a
two-year investment programme of £25m-£30m to drive acceleration in
a compounding model by:
●
Growing a highly engaged and
valuable audience - increased focus on brand leadership and
content:
○ Online
users3 stabilisation from H2 2023 with growth in
Technology and Gaming verticals with total online users of 222m in
HY 2024, exiting the half year with 232m online users (HY 2023:
247m, H2 2023: 234m).
○ We now
have four top 3 leadership positions2 in key strategic
verticals in the US and/or UK (HY 2023: three), which we believe
will enable higher yields through improved revenue per user and
greater resilience.
●
Diversifying and increasing
revenue per user - adding new routes of monetisation and
driving market-leading positions to improve yield:
○ First
steps in expanding digital product range in email, social video
including social commerce, and digital subscriptions.
○
Go.Compare year-on-year revenue growth of +30% driven by strong car
insurance performance.
○ B2B
returned to year-on-year growth with organic revenue growth of
+7%.
●
Optimising our
portfolio
○ This is
a continuous process and is supported by the brand segmentation
between Hero, Halo and Cash Generators and the recently announced
reorganisation of the Group into three distinct business units -
B2C, Go.Compare and B2B.
○ The
Board's view is that the businesses making up the Group are
significantly undervalued. The Board will continue to keenly
appraise performance and will actively look at further options to
accelerate value creation across the Group's business
units.
CFO
appointment
As announced on 3 May 2024, Sharjeel
Suleman will join the Group as CFO no later than October 2024,
replacing Penny Ladkin-Brand who will be leaving the Group and
stepping down from the Board on 28 July 2024.
Outlook
● The
stabilisation of trends and return to Group organic revenue growth
in Q2 give us confidence in delivering full year performance in
line with expectations.
● We
expect to deliver Group organic revenue growth in H2 2024 and a
full year adjusted operating margin of approximately
28%.
●
Longer-term, we are confident that the focused execution of our GAS
investment programme will drive accelerating organic revenue growth
of mid-single digit compound annual growth ("CAGR") over the next
three years with an adjusted margin of 28-30%.
Jon Steinberg, Future's Chief Executive,
said:
"In December we set out plans to ensure that Future is best
positioned to capitalise on opportunities in our markets. These
plans are centred on growing a highly engaged audience,
diversifying and increasing Revenue Per User and optimising our
portfolio. I'm pleased to report that in the
early stages of this two-year plan we have made good progress,
which will enable us to drive accelerating revenue
growth.
Overall trading in the first-half was in line with our
expectations. Whilst the market environment remains challenging, we
are encouraged by a return to organic revenue growth in Q2,
progress which has continued into Q3. Our focus for the balance of
the year is on continued implementation of the Growth Acceleration
Strategy, with a particular focus on optimising the portfolio and
accelerating value creation for shareholders."
Presentation
A live webcast of the analyst
presentation will be available at 08.30 am (UK time) today
at https://stream.brrmedia.co.uk/broadcast/6631f9e03d21e42c1c32b967
A copy of the presentation will be
available on our website at:
https://www.futureplc.com/investor-results/
A recording of the webcast will
also be made available.
The definitions below apply
throughout the document.
1) A reconciliation of adjusted
results to statutory measures is included in the Glossary section
at the end of this document
2) Comscore Media Metrix
Demographic Profile, March 2024 - Mobile and Desktop Age 2+ and
Total Mobile 18+ US and UK
3) Online users defined as monthly
online users from Google Analytics and, unless otherwise stated, is
the monthly average over the financial year and excludes Gardening
Know How. Forums are excluded as they are non-commercial websites
for which Future does not write content, and are not actively
managed or monetised.
Enquiries:
|
Future plc
|
+44 (0)122 544 2244
|
|
Jon Steinberg, Chief Executive
Officer
|
|
|
Penny Ladkin-Brand, Chief
Financial and Strategy Officer
|
|
|
Marion Le Bot, Head of Investor
Relations
|
+44 (0)777 564 1509
|
|
|
|
|
Media
|
+44 (0)203 805 4822
|
|
Headland
|
|
|
Stephen Malthouse, Charlie
Twigg
|
|
|
future@headlandconsultancy.com
|
|
About
Future
We are the platform for creating and distributing trusted,
specialist content, to build engaged and valuable global
communities. We operate c.230 brands in diversified content
verticals, with multiple market leading positions and three core
monetisation frameworks: advertising, eCommerce affiliate and
direct consumer monetisation (subscriptions and newstrade magazine
sale). Our content is published and distributed through a range of
formats including websites, email newsletters, videos, magazines
and live events. The successful execution of our strategy is
focused on three pillars: grow engaged audience, diversify and grow
revenue per user and optimise the portfolio.
Chief Executive Officer's review
Media has always been, and will
always be, one of the most dynamic industries. Therefore, the
agility to lean into opportunities and capacity to fund growth
opportunities are paramount. This is the genesis of the
Growth Acceleration
Strategy or GAS,
announced at the full year results in December 2023. It requires a
two-year investment programme that will translate into accelerating
organic revenue growth of mid-single digit CAGR growth over the
next three years for the Group. We expect this to translate into
high-single digit to low double-digit growth for Media and
mid-single digit decline in Magazines. Our financial
characteristics of healthy adjusted operating margins (28-30%) and
strong cash flow generation will remain.
GAS builds on our strong
foundation of innovation and content expertise, but, at the same
time, recognises the requirement for a rigorous focus, and greater
diversification in the way in which our audiences reach our
content.
Our strategic objectives
Our strategy is structured around
a simple equation: reach valuable audiences and grow Revenue Per
User and apply this to as many monetisation routes available,
whilst optimising our portfolio to accelerate value
creation.
1. Reach valuable
audiences
Key to our operating model remains
great content which drives the audience.
We are evolving our approach to
content for reviews and news, focused on improving the overall user
experience notably through video and improved buying guides. In the
period, we have hired 30 editorial heads to support content
creation. Importantly, this has driven an increase in content
output (articles updated or created) in Q2 2024. We have focused
our editorial efforts on the most valuable content, driving an
improved performance by articles which have been updated or created
by 10-20% compared to articles which have not been updated.
Additionally, we leverage our data to inform editorial
prioritisation to improve the return on editorial investment whilst
managing a good balance of news, 'how to' guides and buying
guides.
In the period, we have also made
progress on diversifying our acquisition of audience, notably in
social media and email newsletters. Email newsletter subscribers
are a loyal audience, with rich first-party data that feed into our
data audience platform, Aperture, which in turn enables more
effective contextual premium advertising.
A key measure of success to assess
the value of our audience is our Comscore ranking. In the period,
we have added one top 3 Comscore position (Fashion & Beauty in
the UK) and now hold a total of four top 3 positions in the US and
in the UK.
2. Diversify and grow revenue
per user
This strategic objective is broken
down into two objectives: diversify monetisation by adding new
routes, and driving more value in our existing core business
(premiumisation).
Starting with our core business,
the US digital advertising market is seven times the size of the UK
market, yet as it stands today, our US digital revenue is only 2.4x
the size of our UK revenue. The other opportunity in the US (and
UK) market is to move more of our advertising inventory out of open
auction into premium inventory to generate a higher yield and
create resilience. Today, only one third of our advertising
inventory is sold directly or through premium programmatic at a
yield which is four times the price of the open auction inventory,
highlighting the tangible potential growth opportunities. To drive
these initiatives, we need to leverage our brands, leadership
positions and our sales expertise. These are already starting to
pay off, with growth in our US yield, supported by more inventory
being sold directly, as well as organic growth in US digital
advertising in Q2.
Looking at new opportunities, we
aim to generate greater revenues from our 218m social followers (FY
2023: 217m) through branded content. In the period, we have
established a branded content team which connects editorial and
sales. Tom's Guide's successful TikTok video on foldable phones has
enabled the US sales team to produce branded content campaigns for
a blue chip technology company. The trend for advertisers now is to
focus on both display and branded content, therefore, having this
capability not only drives a new route of monetisation, but is also
valuable to secure display campaigns.
3. Portfolio
optimisation
As mentioned at the FY 2023
results in December 2023, we divided our brands into three
categories; Hero brands (~50% of Group revenue), Halo brands (~30%
of Group revenue) and Cash Generators (~20% of Group revenue) to
prioritise investment and create an ecosystem to leverage
successful initiatives. This is part of our portfolio optimisation
strategic pillar with further work being done to accelerate the
optimisation of the portfolio. The segmentation is driving results
with organic revenue growth from Hero and Halo brands of +3% in the
period compared to (19)% organic decline in Cash
Generators.
In the period, we went further in
our approach by segmenting the Group into three distinct businesses
with newly appointed business leaders: B2C, Go.Compare and B2B.
This new structure will make the Group more agile and less complex,
enabling faster execution of the strategy to deliver improved
growth.
Further work to refine the
portfolio is currently being undertaken, creating a philosophy of
continuous assessment, driving focus and accountability to ensure
execution of our strategy.
The Board will continue to keenly
appraise performance and will actively look at further options to
accelerate value creation across the Group's business
units.
Execution underpinned by values
Since joining a year ago, I've
been extremely impressed by the depth of talent and energy
throughout Future, and I want to personally thank our colleagues
for their hard work. I am incredibly proud to be leading this
organisation.
We operate as a purpose-driven
organisation creating value for all stakeholders. We aim to operate
as a responsible business and everything we do is underpinned by
our purpose and values which fosters an aligned culture across the
organisation. We are extremely fortunate that our brands give us
the platform and opportunities to influence and inspire people
across the globe to encourage positive change.
Outlook
● The
stabilisation of trends and return to Group organic revenue growth
in Q2 give us confidence in delivering full year performance in
line with expectations.
● We
expect to deliver Group organic revenue growth in H2 2024 and a
full year adjusted operating margin of approximately
28%.
●
Longer-term, we are confident that the focused execution of our GAS
investment programme will drive accelerating organic revenue growth
of mid-single digit compound annual growth ("CAGR") over the next
three years with an adjusted margin of 28-30%.
Financial summary
The financial summary is based
primarily on a comparison of results for the half-year ended 31
March 2024 with those for the half-year ended 31 March
2023.
|
|
HY 2024
£m
|
HY
2023
£m
|
|
Revenue
|
391.5
|
404.7
|
|
Adjusted EBITDA
|
113.9
|
141.9
|
|
Adjusted operating profit
|
105.8
|
130.3
|
|
Adjusted profit before tax
|
88.8
|
113.1
|
|
|
|
|
|
Operating profit
|
63.7
|
83.9
|
|
Profit before tax
|
46.6
|
66.4
|
|
|
|
|
|
Basic earnings per share (p)
|
29.2
|
46.9
|
|
Diluted earnings per share (p)
|
29.0
|
46.7
|
|
Adjusted basic earnings per share (p)
|
57.5
|
71.7
|
|
Adjusted diluted earnings per share (p)
|
57.2
|
71.2
|
The Directors believe that
adjusted results provide additional useful information on the core
operational performance of the Group and review the results on an
adjusted basis internally. Refer to the Glossary section at the end
of this document for a reconciliation between adjusted and
statutory results.
Revenue
|
Revenue movement1
|
HY 2024
vs
HY
2023
%
|
|
Organic decline
|
(2)%
|
|
Impact of acquisitions and
disposals
|
+1%
|
|
Year-on-year decline at constant rate
|
(1)%
|
|
Impact of foreign
exchange
|
(2)%
|
|
Reported revenue change
|
(3)%
|
1 The Glossary section of this document provides definitions
of, and reconciliations to, adjusted measures.
Group revenue was down (3)% at
actual currency and (2)% on an organic basis with a further (2%)
decline from adverse foreign exchange. HY 2023 acquisitions which
have not been acquired for a full financial year and HY 2024
disposals contributed a net £7.0m (HY 2023: £2.4m) of revenue
in the period.
|
Revenue
|
HY 2024
£m
|
HY
2023
£m
|
YoY
Var
|
Organic
YoY
Var
|
|
Advertising & other
|
40.0
|
44.3
|
(10)%
|
(9)%
|
|
Affiliates
|
113.2
|
94.5
|
+20%
|
+20%
|
|
Media
|
153.2
|
138.8
|
+10%
|
+11%
|
|
Magazines
|
95.2
|
99.1
|
(4)%
|
(6)%
|
|
Total UK
|
248.4
|
237.9
|
+4%
|
+3%
|
|
Advertising & other*
|
72.8
|
84.5
|
(14)%
|
(9)%
|
|
Affiliates*
|
35.2
|
42.2
|
(17)%
|
(18)%
|
|
Media
|
108.0
|
126.7
|
(15)%
|
(12)%
|
|
Magazines
|
35.1
|
40.1
|
(12)%
|
(8)%
|
|
Total US
|
143.1
|
166.8
|
(14)%
|
(11)%
|
|
|
|
|
|
|
|
Advertising &
other
|
112.8
|
128.8
|
(12)%
|
(9)%
|
|
Affiliates
|
148.4
|
136.7
|
+9%
|
+10%
|
|
Media
|
261.2
|
265.5
|
(2)%
|
0%
|
|
Magazines
|
130.3
|
139.2
|
(6)%
|
(7)%
|
|
TOTAL REVENUE
|
391.5
|
404.7
|
(3)%
|
(2)%
|
*£3.3m of ActualTech revenue from HY 2023 has been
represented from events (advertising & other) to demand gen
(affiliates)
UK revenue increased by +4%
or +£10.5m to £248.4m (HY 2023: £237.9m). Total UK organic revenue
was stronger than in the US with an increase of +3% with +11%
organic revenue growth in Media, marginally offset by a (6)%
decline in Magazines. This resilient performance was driven by a
more diversified revenue mix with the benefit of strong growth in
price comparison, despite a higher proportion of magazines. UK
Media organic performance reflected a (9)% decline in digital
advertising with other media more stable, whilst affiliates were up
+20% as a result of strong growth of +30% in Go.Compare offset by a
decline in affiliate products. Q2 organic revenue growth
accelerated from Q1 to +7% as a result of the momentum from
Go.Compare.
US revenue declined by (14)%
or £(23.7)m to £143.1m (HY 2023: £166.8m), including the negative
impact of foreign exchange and contributions from acquisitions.
Organic revenue was down (11)% in the half but only down
year-on-year (5)% in Q2 as digital advertising returned to growth.
Digital advertising and other media revenue were down (9)%
organically, whilst affiliates revenue declined (18)% in the
period, impacted by challenging market dynamics. Magazines, which
are a small proportion of the US revenue, were down (8)% on an
organic basis in the period, driven by market secular
decline.
Media revenue decreased by
£(4.3)m or (2)% to £261.2m (HY 2023: £265.5m) and was flat on an
organic basis.
Organic digital advertising revenue declined by
(12)% due to the impact of lower online audiences year-on-year and
challenging market conditions. Importantly, the value of our
audience combined with the effectiveness of our sales teams has
driven improvement in the direct digital advertising mix driving
yield resilience. This demonstrates the Group's ability to deliver
valuable audiences to advertisers. Organic other digital revenue
increased +15% organically due to the phasing shift of a big event,
the Photography show, from FY 2023.
Organic affiliate revenue grew by +10% in the
period, with the very strong growth in Go.Compare (+30%), vouchers
(+4%) and B2B partially offset by a decline of (24)% in eCommerce
products. This performance highlights the benefit of our
diversification strategy. In Affiliate products, we have been
impacted by the wider macroeconomy, through lower demand as seen in
the lower audience numbers, as well as a reduction in the average
basket size. In our price comparison business, performance was
strong, notably in car and home insurance, benefiting from a high
volume of quotes due to high renewal premiums and the benefit of
marketing effectiveness across the period.
HY 2024 Media revenues included
£7.0m relating to the acquisitions of Shortlist Media, ActualTech
and Gardening Know How in the prior period.
Magazine revenue declined by
£(8.9)m or (6)% to £130.3m (HY 2023: £139.2m). Magazine organic
revenue was down (7)% year-on-year. Subscriptions (49% of Magazines
revenue) experienced a (6)% organic decline, mainly in specialist
brands with more resilience in premium brands. The rest of the
magazine portfolio was down (8)% organically, largely due to a
challenging comparative for print advertising in the prior
period.
|
REVENUE
|
HY
2024
|
HY
2023
|
Reported
change
|
Organic
change
|
|
B2C
|
263.4
|
301.0
|
(13)%
|
(11)%
|
|
Go.Compare
|
96.1
|
73.8
|
+30%
|
+30%
|
|
B2B
|
32.0
|
29.9
|
+7%
|
+7%
|
|
Total revenue
|
391.5
|
404.7
|
(3)%
|
(2)%
|
Following the reorganisation of the Group into three
divisions, we are starting to display the revenue performance, as
evidenced in the table above. Going forwards, we expect to
disclose further divisional information (see note
1).
Revenue for B2C was impacted by the challenging
digital advertising market, consumer spend on affiliates in Media
with an improving trend in Q2, and secular decline in
magazines.
Revenue for our price comparison
business Go.Compare grew
+30% in the period due to favourable market conditions and
effective marketing, with particularly strong car insurance
performance.
Revenue in our B2B business grew by 7% in the period.
During the course of the year, we brought together our four
separate B2B organisations to form a new B2B division, having
completed the earnout of ActualTech. We are excited about the
potential of this new business unit, which will be fully integrated
across the course of FY 2024. The encouraging start of a return to
growth was driven by strong performance in our email newsletter
publishing business.
Operating profit
Cost of sales including
distribution costs were up 2% year-on-year with an adverse mix in
Media and very strong revenue growth in Go.Compare, reduced by the
benefit from lower rates in Magazines cost of sales and lower
revenue. During the period the Group has refined its policy for
allocating costs between costs of sales and overheads. This is a
change in presentation which has been applied prospectively.
Applying the same methodology to prior period comparatives would
increase cost of sales and reduce other administrative expenses by
£3.2m. See note 3 to the accounts for further details.
Other costs have increased by 3%
reflecting a 5% pay rise awarded to colleagues from January 2024,
which increased salary and wages costs, the accrual of the profit
pool in the current period and investment in headcount with 40
heads added since the start of the financial year to support our
Growth Acceleration Strategy.
As a result, the adjusted
operating profit margin has declined by (5)ppt to 27% (HY 2023:
32%). Being able to deliver a margin of 27% despite inflationary
pressures within wages, the largest cost, and adverse revenue mix
with lower revenue in digital advertising and affiliates products
is a testament to the strength of the Group. The revenue
diversification strategy and the strong financial characteristics
of the Group, even in a challenging macroeconomic environment, have
provided clear benefits. As a result, adjusted operating profit
decreased by £(24.5)m to £105.8m (HY 2023: £130.3m). Statutory
operating profit decreased by £(20.2)m to £63.7m (HY 2023: £83.9m)
and statutory operating margin decreased by (5)ppt to 16% (HY 2023:
21%) driven by the performance in adjusted operating
profit.
Earnings per share
|
|
HY 2024
|
HY
2023
|
|
Basic earnings per share
(p)
|
29.2
|
46.9
|
|
Adjusted basic earnings per share
(p)
|
57.5
|
71.7
|
|
Diluted earnings per share
(p)
|
29.0
|
46.7
|
|
Adjusted diluted basic earnings
per share (p)
|
57.2
|
71.2
|
Basic earnings per share is
calculated using the weighted average number of ordinary shares in
issue during the period of 115.5m (HY 2023: 120.1m), the decrease
reflecting the share buyback programme which ended in January
2024.
The Glossary section at the end of
this document provides the definition of adjusted earnings per
share and note 10 provides a reconciliation to reported earnings
per share. Adjusted profit after tax was £66.4m (HY 2023:
£86.1m).
Transaction and integration related costs
Transaction and integration
related costs of £1.4m incurred in the period reflect
post-integration project costs and fees (HY 2023: £3.2m comprising
£1.2m of deal-related fees, £0.8m of restructuring costs related to
acquisitions and £2.0m onerous property costs, net of £0.8m
released following settlement of a provision for historical legal
claims arising on the Dennis opening balance
sheet).
Exceptional items
Exceptional costs incurred in the
period comprise £1.2m related to onerous properties (HY 2023: £5.3m
relating to restructuring costs and £0.6m to onerous
properties).
Other adjusting items
Amortisation of acquired
intangibles of £33.5m (HY 2023: £30.3m) includes £5.5m accelerated
amortisation of the Look After My Bills ('LAMB') brand and customer
lists, arising with the Go.Compare acquisition. The useful economic
lives of the LAMB assets were reduced during the period, with
the revised lives ending on 30 September 2024, following the plan
to cease active management of the business during this financial
year.
Share-based payment expenses
(relating to equity-settled share awards with vesting periods
longer than twelve months), together with associated social
security costs decreased by £1.0m to £6.0m (HY 2023: £7.0m). The
nature of the all-employee Value Creation Plan scheme means that a
charge is booked irrespective of the likelihood of achieving the
vesting targets.
Net finance costs and refinancing
Following a review of its
committed facilities and expected utilisation, the Group reduced
the commitments on its Revolving Credit Facility ('RCF') from
£500.0m to £350.0m on 16 February 2024 and on its Export
Development Guarantee ('EDG') term facility from £400.0m to £300.0m
on 29 February 2024. At 31 March 2024, 50.0% (£325.0m) of the
Group's facilities remained undrawn (31 March 2023: 52.2% (£469.7m)
undrawn).
Net finance costs decreased to
£17.1m (HY 2023: £17.5m) which includes net external interest
payable of £13.6m reflecting the reduction in the Group's
facilities; £2.5m in respect of the amortisation of arrangement
fees relating to the Group's bank facilities; £0.2m unwinding of
discount offset by £(0.1)m increase in fair value of deferred
consideration relating to the ActualTech acquisition which was
settled on 31 January 2024. A further £0.9m of net interest was
recognised in relation to lease liabilities.
The Group has entered into
interest rate swap agreements which swap the interest profile on a
notional £300.0m (HY 2023: £150.0m) of the Group's EDG term
facility to mitigate the risk of fluctuations in interest rates,
whereby it receives a variable interest rate based on SONIA and
pays fixed rates of between 3.720% and 4.987%. The swaps have been
valued based on the present value of the estimated future cash
flows based on observable yield curves. A net asset of £1.9m was
recognised on the balance sheet at 31 March 2024 (30 September
2023: £5.9m) with a corresponding decrease in the cash flow hedge
reserve.
Taxation
The tax charge for the six months
ended 31 March 2024 is based on the effective tax rate, estimated
on a full year basis, being applied to the statutory profit for the
six months ended 31 March 2024. For FY 2024, the Group's adjusted
effective tax rate is expected to be 25.3% (HY 2023:
23.9%).
The Group's statutory effective
tax rate is expected to be 27.7% (HY 2023: 15.1%) inclusive of
adjustments in respect of previous years. Excluding the
adjustment in respect of previous years the statutory tax rate is
expected to be 25.6% (31 March 2023: 24.4%). The difference between
the statutory rate and the adjusted effective rate is attributable
to movements in the Group's share-based payments which are
recognised in equity.
The increase in the statutory
effective tax rate is due to adjustments in respect of previous
years recorded in FY 2023, which reflect revisions to prior year
estimates where new information became available as the Group
completed its actual tax returns, as well as the correction of a
number of immaterial items.
Balance sheet
Property, plant and equipment
decreased by £2.0m to £32.4m in the period (FY 2023: £34.4m)
primarily reflecting depreciation of £3.2m, offset by capital
expenditure of £1.3m.
Intangible assets decreased by
£54.4m to £1,585.0m (FY 2023: £1,639.4m) driven by amortisation
(£38.4m) and a foreign exchange headwind of £(21.5)m. This was
partially offset by the capitalisation of website development costs
(£5.5m).
Trade and other receivables
decreased by £9.2m to £114.3m (FY 2023: £123.5m) primarily due to
an improvement in cash collection during the period, together with
the impact of foreign exchange.
Trade and other payables decreased
by £5.2m to £123.2m (FY 2023: £128.4m) due to timing of payments
over the period end.
Cash flow and net debt
Net debt at 31 March 2024 was
£296.7m (FY 2023: £327.2m), driven by a decrease in cash including
£32.0m paid in the period for the share buyback programme which
concluded in January 2024.
During the period, there was a
cash inflow from operations of £130.4m (FY 2023: £241.0m, HY 2023:
£117.3m) reflecting strong cash generation. Adjusted operating cash
inflow was £132.8m (FY 2023: £265.4m, HY 2023: £136.2m). A
reconciliation of cash generated from operations to adjusted free
cash flow is included in the Glossary section at the end of this
document.
Other significant movements in
cash flows include a net repayment of bank loans of £68.0m (HY
2023: £15.7m, including repayment of overdraft and net of
arrangement fees), acquisition of own shares of £32.0m (HY 2023:
£7.8m), lease payments of £5.0m (HY 2023: £3.1m) and a dividend in
the period of £3.9m (HY 2023: £4.1m). Foreign exchange and other
movements accounted for the balance of cash flows.
Adjusted free cash flow decreased
marginally to £126.0m (HY 2023: £130.0m), representing 119% of
adjusted operating profit (HY 2023: 100%), reflecting the ongoing
efficient cash management by the Group.
Going concern
The Group has produced forecasts
which have been modelled for different plausible downside
scenarios. These scenarios confirm that even in the most severe but
plausible downside scenarios, the Group can generate positive cash
flows.
The Group's £400.0m EDG term
facility, maturing in November 2027, was reduced to £300.0m via a
prepayment in February 2024. The Group's £500.0m RCF, maturing in
July 2026, was reduced to £350.0m in February 2024 via a
cancellation of commitments. Together with the Group's strong cash
generation, this will ensure the Group has access to sufficient
undrawn committed facilities to support ongoing
operations.
At the period end the Group had
net current liabilities of £45.8m (FY 2023: £7.4m). This is
primarily driven by deferred income of £63.2m and the nature of the
Group's magazine business, where the profile of cash receipts from
wholesalers is typically ahead of the payment of certain magazine
related costs. The Group has consistently delivered adjusted free
cash flow conversion of around 100% and is forecast to generate
sufficient cash flows to meet its liabilities as they fall due. The
increase in net current liabilities since 30 September 2023
includes the impact of £68.0m debt repayment and £32.0m in
respect of the share buyback programme, which reduced cash in
the period.
The Group's principal risks remain
the same as those as set out in the Group's Consolidated Financial
Statements for the year ended 30 September 2023.
After due consideration, the
Directors have concluded that there is a reasonable expectation
that the Group has adequate resources to continue in operational
existence for at least twelve months from the date of this report.
For this reason, the Directors continue to adopt the going concern
basis in preparing the consolidated financial statements for the HY
2024 results.
Condensed consolidated interim financial
statements
Consolidated income statement
for the six months ended 31 March
2024 (unaudited)
|
|
|
6 months to 31 March
2024
|
6 months
to 31 March 2023
|
|
|
Note
|
£m
|
£m
|
|
Revenue
|
1,2
|
391.5
|
404.7
|
|
Net operating expenses
|
3
|
(327.8)
|
(320.8)
|
|
Operating profit
|
|
63.7
|
83.9
|
|
Net finance costs
|
7
|
(17.1)
|
(17.5)
|
|
Profit before tax
|
|
46.6
|
66.4
|
|
Tax charge
|
8
|
(12.9)
|
(10.0)
|
|
Profit for the period attributable to owners of the
parent
|
|
33.7
|
56.4
|
Earnings per 15p Ordinary share
|
|
Note
|
|
6 months
to
31 March
2024
|
6 months
to
31
March
2023
|
|
|
|
|
pence
|
pence
|
|
Basic earnings per share
|
10
|
|
29.2
|
46.9
|
|
Diluted earnings per
share
|
10
|
|
29.0
|
46.7
|
|
Consolidated statement of comprehensive
income
|
|
for the six months ended 31 March
2024 (unaudited)
|
|
|
|
|
|
|
|
|
6 months to 31 March
2024
|
6 months
to 31 March 2023
|
|
|
£m
|
£m
|
|
Profit for the period
|
33.7
|
56.4
|
|
Items that may be reclassified to the consolidated income
statement
|
|
|
|
Currency translation
differences
|
(20.8)
|
(50.1)
|
|
(Loss)/gain on cash flow hedge (net
of tax)
|
(3.0)
|
1.4
|
|
Other comprehensive expense for the period
|
(23.8)
|
(48.7)
|
|
Total comprehensive income for the period attributable to
owners of the parent
|
9.9
|
7.7
|
Consolidated statement of changes in equity
for the six months ended 31 March
2024 (unaudited)
|
|
Note
|
Issued share
capital
|
Share
premium
|
Capital redemption
reserve
|
Merger
reserve
|
Treasury
reserve
|
Cash flow hedge
reserve
|
Accumulated exchange
differences
|
Retained
earnings
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Balance at 01 October 2023
|
|
17.8
|
197.0
|
0.3
|
581.9
|
(15.3)
|
4.4
|
27.8
|
300.8
|
1,114.7
|
|
Profit for the period
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
33.7
|
33.7
|
|
Currency translation
differences
|
|
-
|
-
|
-
|
-
|
-
|
-
|
(20.8)
|
-
|
(20.8)
|
|
Loss on cash flow hedge
|
13
|
-
|
-
|
-
|
-
|
-
|
(4.0)
|
-
|
-
|
(4.0)
|
|
Deferred tax on cash flow
hedge
|
|
-
|
-
|
-
|
-
|
-
|
1.0
|
-
|
-
|
1.0
|
|
Other comprehensive expense for the period
|
|
-
|
-
|
-
|
-
|
-
|
(3.0)
|
(20.8)
|
-
|
(23.8)
|
|
Total comprehensive income for the period
|
|
-
|
-
|
-
|
-
|
-
|
(3.0)
|
(20.8)
|
33.7
|
9.9
|
|
Share capital issued during the
period
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Acquisition of own shares
|
15
|
(0.5)
|
-
|
0.5
|
-
|
-
|
-
|
-
|
(31.6)
|
(31.6)
|
|
Merger reserve reduction
|
16
|
-
|
-
|
-
|
(472.9)
|
-
|
-
|
-
|
472.9
|
-
|
|
Share premium reduction
|
16
|
-
|
(197.0)
|
-
|
-
|
-
|
-
|
-
|
197.0
|
-
|
|
Share schemes
|
|
|
|
|
|
|
|
|
|
|
|
- Issue of treasury shares to
employees
|
|
-
|
-
|
-
|
-
|
3.9
|
-
|
-
|
(3.9)
|
-
|
|
- Value of employees'
services
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
6.0
|
6.0
|
|
- Deferred tax on options
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
0.1
|
0.1
|
|
Dividends paid to
shareholders
|
9
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(3.9)
|
(3.9)
|
|
Balance at 31 March 2024
|
|
17.3
|
-
|
0.8
|
109.0
|
(11.4)
|
1.4
|
7.0
|
971.1
|
1,095.2
|
|
Balance at 1 October 2022
|
|
18.1
|
197.0
|
-
|
581.9
|
(8.0)
|
-
|
70.7
|
201.0
|
1,060.7
|
|
Profit for the period
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
56.4
|
56.4
|
|
Currency translation
differences
|
|
-
|
-
|
-
|
-
|
-
|
-
|
(50.1)
|
-
|
(50.1)
|
|
Gain on cash flow hedge
|
|
-
|
-
|
-
|
-
|
-
|
1.4
|
-
|
-
|
1.4
|
|
Other comprehensive expense for the
period
|
|
-
|
-
|
-
|
-
|
-
|
1.4
|
(50.1)
|
-
|
(48.7)
|
|
Total comprehensive
income for the period
|
|
-
|
-
|
-
|
-
|
-
|
1.4
|
(50.1)
|
56.4
|
7.7
|
|
Acquisition of own shares
|
15
|
-
|
-
|
-
|
-
|
(7.8)
|
-
|
-
|
-
|
(7.8)
|
|
Share schemes
|
|
|
|
|
|
|
|
|
|
|
|
- Issue of treasury shares
to employees
|
|
-
|
-
|
-
|
-
|
3.7
|
-
|
-
|
(3.7)
|
-
|
|
- Value of employees'
services
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
6.8
|
6.8
|
|
- Current tax on options
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(0.1)
|
(0.1)
|
|
- Deferred tax on options
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(6.1)
|
(6.1)
|
|
Dividends paid to
shareholders
|
9
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(4.1)
|
(4.1)
|
|
Balance at 31 March 2023
|
|
18.1
|
197.0
|
-
|
581.9
|
(12.1)
|
1.4
|
20.6
|
250.2
|
1,057.1
|
Consolidated balance sheet
as at 31 March 2024
(unaudited)
|
|
|
31 March
2024
|
31 March
2023
|
30
September 2023
|
|
Note
|
£m
|
£m
|
£m
|
|
Assets
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
Property, plant and
equipment
|
|
32.4
|
37.5
|
34.4
|
|
Intangible assets -
goodwill
|
11
|
1,043.0
|
1,047.3
|
1,053.6
|
|
Intangible assets - other
|
11
|
542.0
|
612.1
|
585.8
|
|
Financial asset -
derivative
|
13
|
2.6
|
1.4
|
6.0
|
|
Total non-current assets
|
|
1,620.0
|
1,698.3
|
1,679.8
|
|
Current assets
|
|
|
|
|
|
Inventories
|
|
0.6
|
1.8
|
1.3
|
|
Corporation tax
recoverable
|
|
9.9
|
15.4
|
0.3
|
|
Deferred tax
|
|
10.8
|
3.8
|
12.8
|
|
Trade and other
receivables
|
|
114.3
|
112.7
|
123.5
|
|
Cash and cash equivalents
|
|
23.1
|
30.8
|
60.3
|
|
Finance lease receivable
|
|
2.7
|
3.8
|
3.3
|
|
Deferred consideration
|
|
0.1
|
-
|
-
|
|
Total current assets
|
|
161.5
|
168.3
|
201.5
|
|
Total assets
|
|
1,781.5
|
1,866.6
|
1,881.3
|
|
Equity and liabilities
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Issued share capital
|
15
|
17.3
|
18.1
|
17.8
|
|
Share premium account
|
16
|
-
|
197.0
|
197.0
|
|
Capital redemption reserve
|
16
|
0.8
|
-
|
0.3
|
|
Merger reserve
|
16
|
109.0
|
581.9
|
581.9
|
|
Treasury reserve
|
16
|
(11.4)
|
(12.1)
|
(15.3)
|
|
Cash flow hedge reserve
|
16
|
1.4
|
1.4
|
4.4
|
|
Accumulated exchange
differences
|
16
|
7.0
|
20.6
|
27.8
|
|
Retained earnings
|
|
971.1
|
250.2
|
300.8
|
|
Total equity
|
|
1,095.2
|
1,057.1
|
1,114.7
|
|
Non-current liabilities
|
|
|
|
|
|
Financial liabilities -
interest-bearing loans and borrowings
|
|
319.8
|
421.7
|
387.5
|
|
Lease liability due in more than one
year
|
|
31.3
|
42.4
|
35.5
|
|
Deferred tax
|
|
108.7
|
122.4
|
115.5
|
|
Provisions
|
14
|
7.0
|
7.6
|
7.2
|
|
Deferred income
|
|
11.5
|
12.5
|
11.9
|
|
Financial liability -
derivative
|
13
|
0.7
|
-
|
0.1
|
|
Total non-current liabilities
|
|
479.0
|
606.6
|
557.7
|
|
Current liabilities
|
|
|
|
|
|
Trade and other payables
|
12
|
123.2
|
115.7
|
128.4
|
|
Deferred income
|
|
63.2
|
61.0
|
58.5
|
|
Corporation tax payable
|
|
6.1
|
-
|
-
|
|
Lease liability due within one
year
|
|
9.0
|
9.7
|
9.3
|
|
Deferred consideration
|
|
-
|
3.6
|
-
|
|
Contingent consideration
|
|
-
|
7.0
|
8.2
|
|
Deferred tax
|
|
5.8
|
5.9
|
4.5
|
|
Total current liabilities
|
|
207.3
|
202.9
|
208.9
|
|
Total liabilities
|
|
686.3
|
809.5
|
766.6
|
|
Total equity and liabilities
|
|
1,781.5
|
1,866.6
|
1,881.3
|
Consolidated cash flow statement
for the six months ended 31 March
2024 (unaudited)
|
|
6 months to 31 March
2024
|
6 months
to 31 March 2023
|
|
£m
|
£m
|
|
Cash flows from operating activities
|
|
|
|
Cash generated from
operations
|
130.4
|
117.3
|
|
Net interest paid on bank
facilities
|
(13.6)
|
(9.0)
|
|
Interest paid on lease
liabilities
|
(0.9)
|
(1.3)
|
|
Tax paid
|
(19.2)
|
(20.7)
|
|
Net
cash generated from operating activities
|
96.7
|
86.3
|
|
Cash flows from investing activities
|
|
|
|
Purchase of property, plant and
equipment
|
(1.3)
|
(1.1)
|
|
Purchase of computer software and
website development
|
(5.5)
|
(5.1)
|
|
Purchase of subsidiary undertakings,
net of cash acquired
|
(7.9)
|
(44.0)
|
|
Proceeds on disposal of
magazines
|
(0.1)
|
-
|
|
Net
cash used in investing activities
|
(14.8)
|
(50.2)
|
|
Cash flows from financing activities
|
|
|
|
Acquisition of own shares
|
(32.0)
|
(7.8)
|
|
Drawdown of bank loans
|
140.0
|
250.1
|
|
Repayment of bank loans
|
(208.0)
|
(256.0)
|
|
Repayment of overdraft
|
-
|
(4.2)
|
|
Bank arrangement fees
|
-
|
(5.6)
|
|
Repayment of principal element of
lease liabilities
|
(5.0)
|
(3.1)
|
|
Dividends paid
|
(3.9)
|
(4.1)
|
|
Net
cash used in financing activities
|
(108.9)
|
(30.7)
|
|
Net
(decrease)/increase in cash and cash equivalents
|
(27.0)
|
5.4
|
|
Cash and cash equivalents at
beginning of period
|
60.3
|
29.2
|
|
Effects of exchange rate changes on
cash and cash equivalents
|
(10.2)
|
(3.8)
|
|
Cash and cash equivalents at end of period
|
23.1
|
30.8
|
Notes to the consolidated cash flow
statement
for the six months ended 31 March
2024 (unaudited)
A. Cash generated from operations
The reconciliation of profit for
the period to cash generated from operations is set out
below:
|
|
6 months
to
31 March
2024
|
6 months
to
31
March
2023
|
|
£m
|
£m
|
|
Profit for the period
|
33.7
|
56.4
|
|
Adjustments for:
|
|
|
|
Depreciation
|
3.2
|
4.8
|
|
Impairment charge on tangible
assets
|
0.1
|
2.4
|
|
Amortisation of intangible
assets
|
38.4
|
37.1
|
|
Share-based payments
|
6.0
|
6.8
|
|
Net finance costs
|
17.1
|
17.5
|
|
Tax charge
|
12.9
|
10.0
|
|
Cash generated from operations before changes in working
capital and provisions
|
111.4
|
135.0
|
|
Decrease in provisions
|
(0.4)
|
(12.5)
|
|
Decrease/(increase) in
inventories
|
0.7
|
(0.6)
|
|
Decrease in trade and other
receivables
|
9.4
|
17.2
|
|
Increase/(decrease) in trade and
other payables
|
9.3
|
(21.8)
|
|
Cash generated from operations
|
130.4
|
117.3
|
B. Analysis of net debt
|
|
|
30
September
2023
£m
|
Net cash
flows
£m
|
Other non-cash
changes
£m
|
Exchange
movements
£m
|
31 March
2024
£m
|
|
Cash and cash equivalents
|
60.3
|
(27.0)
|
-
|
(10.2)
|
23.1
|
|
Debt due after more than one
year
|
(387.5)
|
68.0
|
(2.5)
|
2.2
|
(319.8)
|
|
Net
debt
|
(327.2)
|
41.0
|
(2.5)
|
(8.0)
|
(296.7)
|
C. Reconciliation of movement in net debt
|
|
6 months to 31 March
2024
|
6 months
to 31 March 2023
|
|
£m
|
£m
|
|
Net debt at start of
period
|
(327.2)
|
(423.6)
|
|
(Decrease)/increase in cash and cash
equivalents
|
(27.0)
|
5.4
|
|
Decrease in borrowings
|
68.0
|
15.7
|
|
Amortisation of loan issue
costs
|
(2.5)
|
(2.0)
|
|
Exchange movements
|
(8.0)
|
13.6
|
|
Net
debt at end of period
|
(296.7)
|
(390.9)
|
Basis of preparation
The condensed consolidated interim
financial statements for the six-month period ended 31 March 2024
are unaudited but have been subject to an independent review by the
auditor. They do not constitute statutory financial statements as
defined in section 434 of the Companies Act 2006. The comparative
figures are for the six month period ended 31 March
2023.
This unaudited condensed
consolidated interim financial information for the six months ended
31 March 2024 has been prepared in accordance with International
Accounting Standard 34 Interim
Financial Reporting in conformity with the requirements of
the Companies Act 2006, and in accordance with the Disclosure
Guidance and Transparency Rules of the Financial Conduct
Authority.
The interim financial information
contained in the Interim Report should be read in conjunction with
the Annual Report and Accounts for the year ended 30 September
2023.
Having considered the Group's
funding position and latest forecasts, the Directors believe that
there is a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future. Accordingly, the Directors continue to adopt the going
concern basis in preparing the condensed interim financial
information.
As stated in the financial
statements for the year ended 30 September 2023 the following
amendments to existing standards have been applied where
applicable:
−
IAS 1 Amendments regarding the disclosure of
accounting policies;
−
IAS 8 Amendments regarding the definition of
accounting estimates;
−
IAS 12 Amendments regarding deferred tax on
leases and decommissioning obligations;
−
IAS 12 Amendments to provide a temporary
exception to the requirements regarding deferred tax assets and
liabilities related to Pillar Two corporation taxes.
There has been no material impact
from the adoption of new standards, amendments to standards or
interpretations which are relevant to the Group.
The Group's principal risks and
uncertainties remain the same as those as set out in the
Group's Consolidated Financial Statements for the year ended 30
September 2023. Reference should be made to pages 48 to 52 of the
2023 Annual Report and Accounts for more detail on the potential
impact of risks and examples of mitigation.
The principal risks relevant to the
Group's activities at the half year are: Personal data; Economic
& geo-political uncertainty; Reliance on key third party
service providers; Media market disruption and changing consumer
habits; Key person risk; Cyber security; Reliance on third party
distribution platforms; Digital advertising market changes; People;
IT operational resilience; and Climate change.
Presentation of non-statutory measures
The Directors believe that
adjusted results and adjusted earnings per share provide additional
useful information on the core operational performance of the Group
to shareholders, and review the results of the Group on an adjusted
basis internally. The term 'adjusted' is not a defined term under
IFRS and may not therefore be comparable with similarly titled
profit measurements reported by other companies. It is not intended
to be a substitute for, or superior to, IFRS measurements of
profit.
The Glossary section at the end of
this document provides definitions of and reconciliations to
non-statutory measures.
Notes to the financial information
1. Segmental reporting
Our operating segments are reported
based on financial information provided to the Executive Directors
and represents the "Chief Operating Decision Maker".
The Group is organised and arranged
primarily by reportable segments. The Executive Directors consider
the performance of the business from a geographical perspective,
namely the UK and the US. The Australian business is considered to
be part of the UK segment and is not reported separately due to its
size. The Group also uses a sub-segment split of Media (websites
and events) and Magazines for further analysis. The Group considers
that the assets within each geographical segment are exposed to the
same risks.
It is anticipated that with effect
from 1 October 2024 the Group will form the B2B, B2C and Go.Compare
"new divisional structure". At 31 March 2024 its components, UK and
the US, continued to be managed separately and reported separately
to the Executive Directors. It is anticipated that from 1 October
2024 the necessary financial information will be available and
provided to the Executive Directors based on the new
divisional structure, in order to consider the performance of the
business.
(a) Reportable segment:
(i) Segment
revenue
|
|
Sub-segment
|
6 months
to
31 March
2024
£m
|
Sub-segment
|
6 months
to
31
March
2023
£m
|
|
|
Media
£m
|
Magazines
£m
|
Total
£m
|
Media
£m
|
Magazines
£m
|
Total
£m
|
|
Segment:
|
|
|
|
|
|
|
|
UK
|
153.2
|
95.2
|
248.4
|
138.8
|
99.1
|
237.9
|
|
US
|
108.0
|
35.1
|
143.1
|
126.7
|
40.1
|
166.8
|
|
Total
|
261.2
|
130.3
|
391.5
|
265.5
|
139.2
|
404.7
|
Transactions between segments are
carried out at arm's length.
(ii) Segment
adjusted EBITDA
|
|
|
|
6 months
to
31 March
2024
£m
|
|
|
6 months
to
31
March
2023
£m
|
|
|
Adjusted EBITDA prior
to
intra-group
adjustments
£m
|
Intra-group
adjustments
£m
|
Adjusted
EBITDA
£m
|
Adjusted
EBITDA prior to
intra-group
adjustments
£m
|
Intra-group
adjustments
£m
|
Adjusted
EBITDA
£m
|
|
UK
|
51.0
|
32.3
|
83.3
|
52.7
|
42.5
|
95.2
|
|
US
|
62.9
|
(32.3)
|
30.6
|
89.2
|
(42.5)
|
46.7
|
|
Total
|
113.9
|
-
|
113.9
|
141.9
|
-
|
141.9
|
(iii) Segment adjusted
operating profit
|
|
|
|
6 months
to
31 March
2024
£m
|
|
|
6 months
to
31
March
2023
£m
|
|
|
Adjusted
operating
profit prior
to
intra-group
adjustments
£m
|
Intra-group
adjustments
£m
|
Adjusted
operating
profit
£m
|
Adjusted
operating
profit
prior to
intra-group
adjustments
£m
|
Intra-group
adjustments
£m
|
Adjusted
operating
profit
£m
|
|
UK
|
44.4
|
32.3
|
76.7
|
43.7
|
42.5
|
86.2
|
|
US
|
61.4
|
(32.3)
|
29.1
|
86.6
|
(42.5)
|
44.1
|
|
Total
|
105.8
|
-
|
105.8
|
130.3
|
-
|
130.3
|
A reconciliation of total segment
adjusted EBITDA and adjusted operating profit to profit before tax
is provided in the Glossary section at the end of this
document.
2. Revenue
The table below disaggregates
revenue according to the timing of satisfaction of performance
obligations:
|
|
|
|
6 months to 31 March
2024
£m
|
|
|
6 months
to 31 March 2023
£m
|
|
|
Over
time
£m
|
Point in
time
£m
|
Total
revenue
£m
|
Over
time
£m
|
Point
in
time
£m
|
Total
revenue
£m
|
|
Total revenue
|
7.2
|
384.3
|
391.5
|
8.0
|
396.7
|
404.7
|
See note 1 for disaggregation of
revenue by geography.
3. Net operating expenses
Operating profit is stated after
charging:
|
|
|
|
6 months
to
31 March
2024
£m
|
6 months
to
31
March
2023
£m
|
|
Cost of sales
|
(215.9)
|
(209.3)
|
|
Distribution expenses
|
(19.1)
|
(21.2)
|
|
Share-based payments (including
social security costs)
|
(6.0)
|
(7.0)
|
|
Transaction and integration
related costs (note 4)
|
(1.4)
|
(3.2)
|
|
Exceptional items (note
5)
|
(1.2)
|
(5.9)
|
|
Depreciation
|
(3.2)
|
(4.8)
|
|
Amortisation
|
(38.4)
|
(37.1)
|
|
Impairment charge on tangible
assets
|
(0.1)
|
(2.4)
|
|
Other administration
expenses
|
(42.5)
|
(29.9)
|
|
|
|
|
(327.8)
|
(320.8)
|
During the period to 31 March 2024
the Group has refined its policy for allocating costs between costs
of sales and overheads. This change in presentation has been
applied prospectively. Applying the same methodology to prior
period comparatives would increase cost of sales and reduce other
administrative expenses by £3.2m.
4. Transaction and integration related
costs
|
|
6 months
to
31 March
2024
£m
|
6 months
to
31
March
2023
£m
|
|
Transaction and integration
related costs
|
1.4
|
1.2
|
|
Onerous property costs
|
-
|
2.0
|
|
Total charge
|
1.4
|
3.2
|
Transaction and integration
related costs of £1.4m incurred in the period reflect
post-integration project costs and fees (31 March 2023: £1.2m of
deal-related fees, £0.8m of restructuring costs related to
acquisitions and £2.0m onerous property costs relating to acquired
properties, net of £0.8m released following settlement of a
provision for historic legal claims recognised on the Dennis
opening balance sheet).
5. Exceptional items
|
|
6 months
to
31 March
2024
£m
|
6 months
to
31
March
2023
£m
|
|
Onerous property costs
|
1.2
|
0.6
|
|
Restructuring costs
|
-
|
5.3
|
|
Total charge
|
1.2
|
5.9
|
Exceptional costs incurred in the
period comprise £1.2m relating to onerous properties (31 March
2023: £5.3m relating to restructuring costs and £0.6m relating to
onerous properties).
6. Employee costs
|
|
6 months
to
31 March
2024
£m
|
6 months
to
31
March
2023
£m
|
|
Wages and salaries
|
90.8
|
84.5
|
|
Social security costs
|
8.4
|
8.1
|
|
Other pension costs
|
2.7
|
2.7
|
|
Share schemes:
|
|
|
|
Value of employees'
services
|
6.0
|
6.8
|
|
Employer's social security costs
on share options
|
0.5
|
-
|
|
Total employee costs
|
108.4
|
102.1
|
Wages and salaries in the table
above include the all-employee profit pool bonus in the current
period.
IFRS 2 Share-based Payment requires an
expense for equity instruments granted to be recognised over the
appropriate vesting period, measured at their fair value at the
date of grant.
The fair value has been calculated
using Black-Scholes and Monte Carlo models, using the most
appropriate model for each scheme. Assumptions have been made in
these models for expected volatility, risk-free rates and dividend
yields.
Key management personnel compensation
|
|
|
|
|
|
6 months
to
31 March
2024
£m
|
6 months
to
31
March
2023
£m
|
|
Salaries and other short-term
employee benefits
|
1.0
|
1.0
|
|
Share schemes
|
|
|
|
Value of employees'
services
|
1.0
|
1.5
|
|
Total employee costs
|
2.0
|
2.5
|
Key management personnel are
deemed to be the members of the Board of Future plc.
7. Finance income and costs
|
|
6 months
to
31 March
2024
£m
|
6 months
to
31
March
2023
£m
|
|
Interest payable on interest-bearing
loans and borrowings
|
(14.6)
|
(13.9)
|
|
Amortisation of bank loan
arrangement fees
|
(2.5)
|
(2.0)
|
|
Interest payable on lease
liabilities
|
(1.0)
|
(1.4)
|
|
Unwinding of discount on deferred
consideration
|
(0.2)
|
-
|
|
Unwinding of discount on contingent
consideration
|
-
|
(0.3)
|
|
Total finance costs
|
(18.3)
|
(17.6)
|
|
|
|
|
|
Interest receivable on
interest-bearing loans and borrowings
|
1.0
|
-
|
|
Interest receivable on lease
liabilities
|
0.1
|
0.1
|
|
Increase in fair value of deferred
consideration
|
0.1
|
-
|
|
Total finance income
|
1.2
|
0.1
|
|
Net
finance costs
|
(17.1)
|
(17.5)
|
Following a review of its
committed facilities and expected utilisation the Group reduced the
commitments on its Revolving Credit Facility ('RCF') from £500.0m
to £350.0m on 16 February 2024 and on its Export Development
Guarantee ('EDG') term facility from £400.0m to £300.0m on 29
February 2024. At 31 March 2024, 50.0% (£325.0m) of the Group's
facilities remained undrawn (31 March 2023: 52.2% (£469.7m)
undrawn).
8. Tax on profit
The tax charge for the six months
ended 31 March 2024 is based on the effective tax rate, estimated
on a full year basis, being applied to the statutory profit for the
six months ended 31 March 2024. The Group's adjusted effective tax
rate is expected to be 25.3% (31 March 2023: 23.9%).
The Group's statutory effective
tax rate is expected to be 27.7% (31 March 2023: 15.1%) inclusive
of adjustments in respect of previous years. Excluding the
adjustment in respect of previous years the statutory tax rate is
expected to be 25.6% (31 March 2023: 24.4%). The difference between
the statutory rate and the adjusted effective rate is attributable
to movements in the Group's share-based payments which are
recognised in equity.
The increase in the statutory
effective tax rate is due to adjustments in respect of previous
years recorded in the year to 30 September 2023, which reflect
revisions to prior year estimates where new information became
available as the Group completed its actual tax returns, as well as
the correction of a number of immaterial items.
The corporation tax recoverable
disclosed at 30 September 2023 of £0.3m was presented on a net
basis, primarily comprising a £10.3m receivable in the US and a
£9.7m payable in the UK. At 31 March 2024 this was presented on a
gross basis with the Group concluding the prior year presentation
is not material for representation purposes.
9. Dividends
|
Equity dividends
|
6 months
to
31 March
2024
|
6 months
to
31
March
2023
|
|
Number of shares in issue at end of
period (million)
|
115.2
|
120.9
|
|
Dividends paid in year (pence per
share)
|
3.4
|
3.4
|
|
Dividends paid in period (£m)
|
(3.9)
|
(4.1)
|
Interim dividends are recognised
in the period in which they are paid and final dividends are
recognised in the period in which they are approved. The dividend
in respect of the year ended 30 September 2023 was paid on 13
February 2024. The Board did not propose a dividend for the six
months ended 31 March 2024 (31 March 2023: no dividend).
10. Earnings per share
Basic earnings per share are
calculated using the weighted average number of Ordinary shares in
issue during the year. Diluted earnings per share have been
calculated by taking into account the dilutive effect of shares
that would be issued on conversion into Ordinary shares of awards
held under employee share schemes.
Adjusted earnings per share
removes the effect of share based payments, transaction and
integration related costs (note 4), exceptional items (note 5),
amortisation of intangible assets arising on business combinations,
decrease in fair value of deferred consideration, unwinding of
discount on contingent and deferred consideration, and any related
tax effects from the calculation.
|
|
|
|
|
|
6 months
to
31 March
2024
|
6 months
to
31
March
2023
|
|
Adjustments to profit after
tax:
|
|
|
|
Profit after tax (£m)
|
33.7
|
56.4
|
|
Share-based payments (including
social security costs) (£m)
|
6.0
|
7.0
|
|
Transaction and integration
related costs (£m)
|
1.4
|
3.2
|
|
Exceptional items (£m)
|
|
|
|
|
1.2
|
5.9
|
|
Amortisation of intangible assets
arising on acquisitions (£m)
|
33.5
|
30.3
|
|
Decrease in fair value of deferred
consideration (£m)
|
(0.1)
|
-
|
|
Unwinding of discount on
contingent consideration (£m)
|
-
|
0.3
|
|
Unwinding of discount on deferred
consideration (£m)
|
0.2
|
-
|
|
Tax effect of the above
adjustments and the impact of tax items relating to prior years
(£m)
|
(9.5)
|
(17.0)
|
|
Adjusted profit after tax (£m)
|
66.4
|
86.1
|
|
Weighted average number of shares
in issue during the period:
|
|
|
|
- Basic
|
115,471,229
|
120,146,502
|
|
- Dilutive effect of share
options
|
661,660
|
714,468
|
|
- Diluted
|
116,132,889
|
120,860,970
|
|
Basic earnings per share
(pence)
|
29.2
|
46.9
|
|
Adjusted basic earnings per share
(pence)
|
57.5
|
71.7
|
|
Diluted earnings per share
(pence)
|
29.0
|
46.7
|
|
Adjusted diluted earnings per share (pence)
|
57.2
|
71.2
|
|
The adjustments to profit after
tax have the following effect:
|
|
|
|
Basic earnings per share (pence)
|
29.2
|
46.9
|
|
Share-based payments (including
social security costs) (pence)
|
5.2
|
5.8
|
|
Transaction and integration
related costs (pence)
|
1.2
|
2.7
|
|
Exceptional items
(pence)
|
1.0
|
4.9
|
|
Amortisation of intangible assets
arising on acquisitions (pence)
|
29.0
|
25.2
|
|
Increase in fair value of deferred
consideration (pence)
|
(0.1)
|
-
|
|
Unwinding of discount on
contingent consideration (pence)
|
-
|
0.2
|
|
Unwinding of discount on deferred
consideration (pence)
|
0.2
|
-
|
|
Tax effect of the above
adjustments and the impact of tax items relating to prior years
(pence)
|
(8.2)
|
(14.0)
|
|
Adjusted basic earnings per share (pence)
|
57.5
|
71.7
|
|
Diluted earnings per share (pence)
|
29.0
|
46.7
|
|
Share-based payments (including
social security costs) (pence)
|
5.2
|
5.8
|
|
Transaction and integration
related costs (pence)
|
1.2
|
2.6
|
|
Exceptional items
(pence)
|
1.0
|
4.9
|
|
Amortisation of intangible assets
arising on acquisitions (pence)
|
28.8
|
25.1
|
|
Increase in fair value of deferred
consideration (pence)
|
(0.1)
|
-
|
|
Unwinding of discount on
contingent consideration (pence)
|
-
|
0.2
|
|
Unwinding of discount on deferred
consideration (pence)
|
0.2
|
-
|
|
Tax effect of the above adjustments
and the impact of tax items relating to prior years
(pence)
|
(8.1)
|
(14.1)
|
|
Adjusted diluted earnings per share (pence)
|
57.2
|
71.2
|
11. Intangible assets
|
|
Goodwill
|
Publishing
rights
|
Brands
|
Customer
relationships
|
Subscribers
|
Advertiser
relationships
|
Other acquired
intangibles
|
Other
|
Total
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Cost
|
|
|
|
|
|
|
|
|
|
|
At 1 October 2022
|
1,340.2
|
90.9
|
501.6
|
57.8
|
86.4
|
22.9
|
43.5
|
59.2
|
2,202.5
|
|
Additions through business
combinations
|
29.2
|
-
|
10.5
|
7.4
|
-
|
-
|
2.0
|
-
|
49.1
|
|
Other additions
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
9.3
|
9.3
|
|
Exchange adjustments
|
(49.1)
|
(0.3)
|
(14.9)
|
(1.7)
|
(4.8)
|
(1.8)
|
(1.5)
|
(1.3)
|
(75.4)
|
|
At 30 September 2023
|
1,320.3
|
90.6
|
497.2
|
63.5
|
81.6
|
21.1
|
44.0
|
67.2
|
2,185.5
|
|
Additions
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
5.5
|
5.5
|
|
Exchange adjustments
|
(12.1)
|
(0.1)
|
(10.0)
|
(0.6)
|
(1.7)
|
(0.6)
|
(0.4)
|
(0.6)
|
(26.1)
|
|
At 31 March 2024
|
1,308.2
|
90.5
|
487.2
|
62.9
|
79.9
|
20.5
|
43.6
|
72.1
|
2,164.9
|
|
Accumulated amortisation and impairment
|
|
|
|
|
|
|
|
|
At 01 October 2022
|
(270.6)
|
(29.9)
|
(63.1)
|
(22.7)
|
(17.1)
|
(3.0)
|
(33.1)
|
(47.2)
|
(486.7)
|
|
Charge for the year
|
-
|
(6.4)
|
(28.7)
|
(8.6)
|
(9.7)
|
(1.7)
|
(4.3)
|
(11.6)
|
(71.0)
|
|
Exchange adjustments
|
3.9
|
0.2
|
3.0
|
0.7
|
1.2
|
0.2
|
1.2
|
1.2
|
11.6
|
|
At 30 September 2023
|
(266.7)
|
(36.1)
|
(88.8)
|
(30.6)
|
(25.6)
|
(4.5)
|
(36.2)
|
(57.6)
|
(546.1)
|
|
Charge for the period
|
-
|
(3.0)
|
(13.8)
|
(4.3)
|
(4.8)
|
(1.2)
|
(6.4)
|
(4.9)
|
(38.4)
|
|
Exchange adjustments
|
1.5
|
0.1
|
1.3
|
0.3
|
0.5
|
0.1
|
0.4
|
0.4
|
4.6
|
|
At 31 March 2024
|
(265.2)
|
(39.0)
|
(101.3)
|
(34.6)
|
(29.9)
|
(5.6)
|
(42.2)
|
(62.1)
|
(579.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value at 31 March 2024
|
1,043.0
|
51.5
|
385.9
|
28.3
|
50.0
|
14.9
|
1.4
|
10.0
|
1,585.0
|
|
Net book value at 30 September
2023
|
1,053.6
|
54.5
|
408.4
|
32.9
|
56.0
|
16.6
|
7.8
|
9.6
|
1,639.4
|
|
Useful economic lives
|
-
|
5-15
|
3-20
years
|
4-10
|
7-11
|
9-15
|
3-10
|
2
|
-
|
|
years
|
years
|
years
|
years
|
years
|
years
|
|
|
|
|
|
|
|
The other acquired intangibles
category in the table above includes assets relating to customer
lists, content and websites.
Any residual amount arising as a
result of the purchase consideration being in excess of the value
of acquired assets is recorded as goodwill.
Other intangible assets relate to
capitalised software costs and website development costs which are
internally generated. Amortisation is included within
administration expenses in the consolidated income
statement.
12. Trade and other payables
|
|
31 March
2024
£m
|
30
September
2023
£m
|
|
Trade payables
|
24.5
|
26.0
|
|
Other taxation and social
security
|
7.5
|
8.7
|
|
Other payables
|
16.5
|
18.5
|
|
Accruals
|
74.7
|
75.2
|
|
Total
|
123.2
|
128.4
|
Trade payables and accruals
principally comprise amounts outstanding for trade purchases and
ongoing costs. The Group has financial risk management policies in
place to ensure all payables are paid within the agreed credit
terms.
The Directors consider that the
carrying amount of trade payables approximates to their fair
value.
13. Financial instruments
The following table presents the
Group's financial assets and liabilities that are measured at fair
value at 31 March 2024:
|
|
31 March
2024
|
30
September 2023
|
|
Financial asset
|
Level 2
|
Level
2
|
Level
3
|
|
Fair value
|
Fair
value
|
Fair
value
|
|
£m
|
£m
|
£m
|
|
Assets
|
|
|
|
|
Financial asset -
derivative
|
2.6
|
6.0
|
-
|
|
Liabilities
|
|
|
|
|
Financial liability -
derivative
|
(0.7)
|
(0.1)
|
-
|
|
Contingent consideration
|
-
|
-
|
(8.2)
|
|
Total
|
1.9
|
5.9
|
(8.2)
|
The Group has entered into
interest rate swap agreements which swap the interest profile on a
notional £300.0m (31 March 2023: £150.0m) of the Group's EDG term
facility to mitigate the risk of fluctuations in interest rates,
whereby it receives a variable interest rate based on SONIA and
pays fixed rates of between 3.720% and 4.987%. The swaps have been
valued based on the present value of the estimated future cash
flows based on observable yield curves. A net asset of £1.9m has
been recognised on the balance sheet at 31 March 2024 (30 September
2023: £5.9m) with a corresponding decrease of £4.0m in the cash
flow hedge reserve (see note 16 for further details).
At 30 September 2023 contingent
consideration of £8.2m ($10.0m) related to the acquisition of
ActualTech, LLC, which was paid in full on 31 January 2024 (being
£7.9m after the impact of foreign exchange on
settlement).
14. Provisions
|
|
31 March
2024
£m
|
30
September
2023
£m
|
|
Property
|
5.4
|
6.7
|
|
Other
|
1.6
|
0.5
|
|
Total
|
7.0
|
7.2
|
The property provision
relates to dilapidations and obligations under short leasehold
agreements on vacant property. The majority of the vacant property
provision is expected to be utilised over the next two
years.
Other provisions of £1.6m (30
September 2023: £0.5m) primarily comprise a legal matter related
to corporate transactions.
15. Issued share capital
During the period no shares were
issued by the Company pursuant to share scheme exercises throughout
the period (31 March 2023: nil). 3,144 (31 March 2023: 2,095)
Ordinary shares were issued under the Share Incentive Plan for a
combined total cash commitment of £nil.
During the period the Group
completed its share buyback programme, resulting in a reduction in
share capital of 3.9m shares in the period, at a nominal value of
£0.5m and a total cost of £31.6m.
As at 31 March 2024 there were
115,203,420 Ordinary shares in issue with a nominal value of £17.3m
(31 March 2023: 120,858,025 with a nominal value of £18.1m; 30
September 2023: 119,077,135 with a nominal value of
£17.8m).
16. Reserves
Share premium account
Share premium represents the
excess of proceeds received over the nominal value of new shares
issued.
In order to create additional
distributable reserves to provide flexibility for shareholder
returns, during the six months to 31 March 2024 the total share
premium reserve of Future plc of £197.0m was cancelled and credited
to the reserves of Future plc, increasing distributable reserves by
the same amount. The balance at 31 March 2024 is £nil.
See 'Merger reserve' section below
for further detail.
Capital redemption reserve
The capital redemption reserve
increased by £0.5m during the period to £0.8m, being the nominal
value of shares purchased and cancelled as part of the share
buyback programme (see note 15 for further details).
Merger reserve
In order to create additional
distributable reserves to provide flexibility for
shareholder returns, during the
six months to 31 March 2024 the total value of the Future plc
merger reserve of £472.9m was capitalised, with B ordinary shares
issued at a total nominal value equal to £472.9m, then cancelled
and extinguished, with £472.9m credited to retained earnings,
increasing distributable reserves by the same amount.
An amount of £109.0m in the merger
reserve arose in previous years following the 1999 Group
reorganisation and is non-distributable.
Treasury reserve
The treasury reserve represents
the cost of shares in Future plc purchased in the market and held
by the Employee Benefit Trust ('EBT') to satisfy awards made by the
trustees.
During the six months to 31 March
2024, 246,138 (31 March 2023: 233,587) of the shares held by the
EBT were used to satisfy the vesting of share options and no shares
were purchased to fund the future vesting of share options (31
March 2023: 625,000 shares were purchased to fund the future
vesting of share options at a total value of £7.8m (31 March 2023:
£nil).
Cash flow hedge reserve
During FY 2023 the Group entered
into interest rate swaps, in order to hedge against fluctuations in
interest rates. The cash flow hedge reserve represents the
cumulative amount of gains and losses on the interest rate swap
deemed effective.
Accumulated exchange differences
The reserve for accumulated
exchange differences comprises the revaluation of the Group's
foreign currency entities, principally the US and Australia, on
consolidation.
17. Contingent liabilities
There were no material contingent
assets or liabilities as at 31 March 2024 (31 March 2023:
£nil).
18. Post balance sheet event
On 15 May 2024 the Board approved
a share buyback of up to £45.0m, which is expected to commence
shortly after this results announcement.
Statement of Directors' responsibilities
We confirm that to the best of our
knowledge:
• the condensed set of financial
statements has been prepared in accordance with IAS 34 Interim
Financial Reporting in conformity with the requirements of the
Companies Act 2006;
• the interim management report
includes a fair review of the information required by:
a) DTR 4.2.7R of the Disclosure
Guidance and Transparency Rules, being an indication of important
events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and
uncertainties for the remaining six months of the year;
and
b) DTR 4.2.8R of the Disclosure
Guidance and Transparency Rules, being related party transactions
that have taken place in the first six months of the current
financial year and that have materially affected the financial
position or performance of the entity during that period; and any
changes in the related party transactions described in the last
annual report that could do so.
A list of current Directors is
maintained on the Future plc website, www.futureplc.com
By order of the Board
Directors
Richard Huntingford
Independent Non-Executive
Chairman
Jon Steinberg
Chief Executive Officer
Penny Ladkin-Brand
Chief Financial and Strategy
Officer
Alan Newman
Independent
Non-Executive
Rob Hattrell
Independent
Non-Executive
Meredith Amdur
Independent
Non-Executive
Mark Brooker
Independent
Non-Executive
Angela Seymour-Jackson
Independent
Non-Executive
Ivana Kirkbride
Independent
Non-Executive
15 May 2024
The maintenance and integrity of
the Future plc website is the responsibility of the Directors; the
work carried out by the auditors does not involve consideration of
these matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to the
financial statements since they were initially presented on the
website.
Legislation in the United Kingdom
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
GLOSSARY
Presentation of non-statutory measures
The Directors believe that
adjusted results and adjusted earnings per share provide additional
useful information on the core operational performance of the Group
to shareholders, and review the results of the Group on an adjusted
basis internally. The term 'adjusted' is not a defined term under
IFRS and may not therefore be comparable with similarly titled
profit measurements reported by other companies. It is not intended
to be a substitute for, or superior to, IFRS measurements of
profit.
Adjustments are made in respect
of:
|
Adjusting item
|
Explanation
|
|
Share-based payments
|
Share-based payment expenses
(relating to equity-settled share awards with vesting periods
longer than 12 months), together with associated social security
costs, are excluded from the adjusted results of the Group as the
Directors believe they result in a level of charge that would
distort the user's view of the core trading performance of the
Group.
|
|
Transaction and integration related
costs
|
Although transactions are a key
part of the Group's strategy, the Group adjusts for costs relating
to the completion and subsequent integration of acquisitions and
other corporate transactions, initiated within 12 months of the
completion date, as these costs are not related to the core trading
of the Group and not doing so would distort the Group's results, so
as to assist the user of the financial statements to understand the
results of the core underlying operations of the Group. Details of
transaction and integration related costs are shown in note
4.
|
|
Exceptional items
|
The Group considers items of income
and expense as exceptional and excludes them from the adjusted
results where the nature of the item, or its size, is material
and/or is not related to the core trading of the Group so as to
assist the user of the financial statements to understand the
results of the core underlying operations of the Group. Details of
exceptional items are shown in note 5.
|
|
Amortisation of acquired intangible
assets
|
The amortisation charge for those
intangible assets recognised on business combinations is excluded
from the adjusted results of the Group since they are non-cash
charges arising from non-trading investment activities. As such,
they are not considered to be reflective of the core trading
performance of the Group. This is consistent with industry peers
and how certain external stakeholders monitor the performance of
the business.
|
|
Amortisation of non acquired
intangible assets, depreciation and interest
|
Adjusted EBITDA excludes the
amortisation charge for computer software and website development,
as well as amortisation of acquired intangible assets, depreciation
and interest.
|
|
Unwinding of discount on deferred
and contingent consideration
|
The Group excludes the unwinding of
the discount on deferred and contingent consideration from the
Group's adjusted results on the basis that it is non-cash and the
balance is driven by the Group's assessment of the relevant
discount rate to apply. Excluding this item ensures comparability
with prior periods.
|
|
Changes in the fair value of
deferred and contingent consideration
|
The Group excludes the
remeasurement of these acquisition-related liabilities from its
adjusted results as the impact of remeasurement can vary
significantly.
|
The tax related to adjusting items
is the tax effect of the items above, calculated using the standard
rate of corporation tax in the relevant jurisdiction.
Reference to 'core or underlying'
reflects the trading results of the Group without the impact of
amortisation of acquired intangible assets, transaction and
integration related costs, exceptional items, share-based payment
expenses (relating to equity-settled share awards with vesting
periods longer than 12 months), together with associated social
security costs and any tax related effects, and unwinding of
discount on deferred and contingent consideration, that would
otherwise distort the users understanding of the Group's
performance.
A summary table of all measures is
included below:
|
APM (Adjusted Performance Measure)
|
Closest equivalent statutory measure
|
Definition
|
|
Adjusted EBITDA
|
Operating profit
|
Adjusted EBITDA represents
operating profit before share-based payments (relating to
equity-settled awards with vesting periods longer than 12 months)
and related social security costs, amortisation, depreciation,
transaction and integration related costs and exceptional
items.
Adjusted EBITDA margin is adjusted
EBITDA as a percentage of revenue.
Adjusting items are shown in the
table below.
|
|
Adjusted operating
profit
|
Operating profit
|
Adjusted operating profit
represents operating profit before share-based payments (relating
to equity-settled awards with vesting periods longer than 12
months) and related social security costs, amortisation of acquired
intangible assets, transaction and integration related costs and
exceptional items.
This is a key management incentive
metric, used within the Group's Deferred Annual Bonus
Plan.
Adjusted operating profit margin
is adjusted operating profit as a
percentage of revenue.
Adjusting items are shown in the
table below.
|
|
Adjusted profit before
tax
|
Profit before tax
|
Adjusted profit before tax
represents earnings before share-based payments (relating to
equity-settled awards with vesting periods longer than 12 months)
and related social security costs, interest, tax, amortisation of
acquired intangible assets, transaction and integration related
costs, exceptional items, unwinding of discount on deferred and
contingent consideration, and any related tax effects.
Adjusting items are shown in the
table below.
|
|
Adjusted diluted earnings per
share
|
Diluted earnings per
share
|
Adjusted diluted earnings per
share (EPS) represents adjusted profit after tax divided by the
weighted average dilutive number of shares at the year end
date.
This is a key management incentive
metric, used within the Group's Performance Share Plan.
A reconciliation is provided in
note 10.
|
|
Adjusted effective tax
rate
|
Effective tax rate
|
Adjusted effective tax rate is
defined as the effective tax rate adjusted for the tax impact of
adjusting items and any other one-off impacts, including
adjustments in respect of previous years.
|
|
Adjusted operating cash
flow
|
Operating cash flow
|
Adjusted operating cash flow
represents cash generated from operations adjusted to exclude cash
flows relating to transaction and integration costs, exceptional
items and for payment of employer's taxes on share-based payments
relating to equity settled share awards with vesting periods longer
than 12 months, and to include lease repayments following the
adoption of IFRS 16 Leases.
|
|
Adjusted free cash flow
|
Free cash flow
|
Adjusted free cash flow is defined
as adjusted operating cash flow less capital expenditure. Capital
expenditure is defined as cash flows relating to the purchase of
property, plant and equipment and purchase of computer software and
website development.
|
|
Net debt
|
The aggregation of cash and
debt
|
Net debt is defined as the
aggregate of the Group's cash and cash equivalents and its external
bank borrowings net of capitalised bank arrangement fees. It does
not include lease liabilities recognised following the adoption of
IFRS 16 Leases.
|
|
Leverage
|
|
Leverage is defined as Net debt as
defined above (excluding capitalised bank arrangement fees and
lease liabilities, and including any non-cash ancillaries), as a
proportion of Adjusted EBITDA and including the 12 month trailing
impact of acquired businesses (in line with the Group's bank
covenants definition).
|
|
Organic growth
|
|
Organic growth is defined as the
like for like portfolio in the period, including the impact of
closures and new launches but excluding acquisitions and disposals
which have not been acquired for a full financial year, and at
constant foreign exchange rates. Constant foreign exchange rates is
defined as the average rate for HY 2024.
|
|
Constant currency
|
|
Constant currency translates the
financial statements at fixed exchange rates to eliminate the
effect of foreign exchange on the financial performance. Constant
foreign exchange rates is defined as the average rate for HY
2024.
|
|
Impact of acquisitions and
disposals
|
|
The impact of acquisitions and
disposals is defined as those which have not been acquired for a
full financial year, and at constant foreign exchange rates.
Constant foreign exchange rates is defined as the average rate for
HY 2024.
|
|
Impact of foreign
exchange
|
|
Impact of foreign exchange is
defined as the increase/decrease in results due to the movement in
the average foreign exchange rate compared to the comparative
period.
|
A reconciliation of adjusted
EBITDA and adjusted operating profit to profit before tax is shown
below:
|
|
6 months
to
31 March
2024
|
6 months
to
31
March
2023
|
|
£m
|
£m
|
|
Adjusted EBITDA
|
113.9
|
141.9
|
|
Depreciation
|
(3.2)
|
(4.8)
|
|
Amortisation of non-acquired
intangible assets
|
(4.9)
|
(6.8)
|
|
Adjusted operating profit
|
105.8
|
130.3
|
|
Share-based payments (including
social security costs)
|
(6.0)
|
(7.0)
|
|
Transaction and integration
related costs (note 4)
|
(1.4)
|
(3.2)
|
|
Exceptional items (note
5)
|
(1.2)
|
(5.9)
|
|
Amortisation of acquired
intangibles
|
(33.5)
|
(30.3)
|
|
Operating profit
|
63.7
|
83.9
|
|
Net finance costs
|
(17.1)
|
(17.5)
|
|
Profit before tax
|
46.6
|
66.4
|
A reconciliation of cash generated
from operations to adjusted free cash flow is shown
below:
|
|
6 months
to
31 March
2024
|
6 months
to 31 March 2023
|
|
£m
|
£m
|
|
Cash generated from operations
|
130.4
|
117.3
|
|
Cash flows related to transaction
and integration related costs
|
4.0
|
12.7
|
|
Cash flows related to exceptional
items
|
3.1
|
8.9
|
|
Settlement of social security costs
on share based payments¹
|
0.3
|
0.4
|
|
Lease payments
|
(5.0)
|
(3.1)
|
|
Adjusted operating cash inflow
|
132.8
|
136.2
|
|
Cash flows related to capital
expenditure
|
(6.8)
|
(6.2)
|
|
Adjusted free cash flow
|
126.0
|
130.0
|
¹ Relating to equity-settled share
awards with vesting periods longer than 12 months.
A reconciliation between adjusted
and statutory earnings per share measures is shown in note
10.
Included below is a reconciliation
between statutory revenue and organic revenue:
|
|
6 months to 31 March
2024
|
6 months
to
31 March
2023
|
YoY
Var
|
|
£m
|
£m
|
|
|
Statutory revenue
|
391.5
|
404.7
|
(3)%
|
|
Revenue from HY 2024 and HY 2023
transactions which have not been acquired for a full financial
year
|
(7.0)
|
(2.4)
|
|
|
Impact of FX at constant
rates
|
(0.2)
|
(9.5)
|
|
|
Organic revenue
|
384.3
|
392.8
|
(2)%
|